Commercial Metals (CMC) Up 7.3% Since Last Earnings Report: Can It Continue?

A month has gone by since the last earnings report for Commercial Metals (CMC). Shares have added about 7.3% in that time frame, outperforming the S&P 500.But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Commercial Metals due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Commercial Metals Company before we dive into how investors and analysts have reacted as of late.Commercial Metals Earnings Miss Estimates in Q3, Sales Dip Y/YCommercial Metals reported adjusted earnings per share (EPS) of 74 cents in third-quarter fiscal 2025, missing the Zacks Consensus Estimate of 85 cents. However, the bottom line fell 27.5% year over year.Net sales in the reported quarter came in at $2.02 billion compared with the year-ago quarter’s $2.08 billion. The reported figure surpassed the Zacks Consensus Estimate of $2.01 billion. The cost of goods sold in the quarter fell 1% year over year to $1.72 billion. The gross profit declined 11.9% year over year to $300 million during this period. The core EBITDA was $204 million in the fiscal third quarter, down 20.3% year over year.Commercial Metals’ Q3 Segment PerformanceThe North America Steel Group segment generated net sales of $1.56 billion in the fiscal third quarter compared with $1.67 billion in the year-ago quarter. We expected net sales of $1.59 billion for the quarter. The segment registered an adjusted EBITDA of around $186 million compared with the year-ago quarter’s $246 million. Our model predicted an adjusted EBITDA of $169 million.The Europe Steel Group segment’s revenues were $247.6 million, up 18.6% from the year-ago quarter. Our model predicted net sales of $195 million. The adjusted EBITDA was $3.6 million in the fiscal third quarter against the year-ago quarter’s negative $4.2 million. We expected an adjusted EBITDA of $0.9 million for the quarter.The Emerging Businesses Group segment generated net sales of $197 million in the fiscal third quarter compared with $188.5 million in the year-ago quarter. We expected net sales of $163 million for the quarter. The segment registered an adjusted EBITDA of $41 million, up 7.9% year over year. Our model predicted an adjusted EBITDA of $42 million.CMC’s Q3 Cash Flow & Balance Sheet UpdatesCommercial Metals reported cash and cash equivalents of $893 million at the end of third-quarter fiscal 2025 compared with $858 million at the end of fiscal 2024. The company’s long-term debt came in at $1.30 billion at the end of the fiscal third quarter compared with $1.15 billion at the fiscal 2024 end. Cash generated from operating activities was around $400 million for the nine months ended May 31, 2025, compared with $548 million in the prior-year comparable period.On June 18, the company declared a quarterly dividend of 18 cents per share. The dividend will be paid out on July 9 to shareholders of record as of June 30, 2025.Commercial Metals’ OutlookCMC expects consolidated financial results in the fourth quarter of fiscal 2025 to improve from the third-quarter reported levels. The company anticipates North America Steel Group’s adjusted EBITDA margin to increase sequentially, driven by higher steel product margins over scrap. Emerging Businesses Group’s financial results are expected to increase on a sequential and year-over-year basis, driven by project backlogs. Adjusted EBITDA for the company’s Europe Steel Group is expected to improve sequentially in the fiscal fourth quarter as well.How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.The consensus estimate has shifted 17.21% due to these changes.VGM ScoresAt this time, Commercial Metals has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of B on the value side, putting it in the second quintile for value investors.Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Commercial Metals has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in the coming year. While not all picks can be winners, previous recommendations have soared +112%, +171%, +209% and +232%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Commercial Metals Company (CMC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks