Comparing Carpenter Tech With Industry Competitors In Metals & Mining Industry

In the ever-changing and fiercely competitive business landscape, conducting thorough company analysis is crucial for investors and industry experts. In this article, we will undertake a comprehensive industry comparison, evaluating Carpenter Tech CRS and its primary competitors in the Metals & Mining industry. By closely examining key financial metrics, market position, and growth prospects, our aim is to provide valuable insights for investors and shed light on company's performance within the industry.

Carpenter Tech Background

Carpenter Technology Corp supplies specialty metals to a variety of end markets, including aerospace and defense, industrial machinery and consumer durables, medical, and energy, among others. The company's reportable segments include; Specialty Alloys Operations and Performance Engineered Products. It generates maximum revenue from the Specialty Alloys Operations segment. The SAO segment is comprised of the company's alloy and stainless steel manufacturing operations. This includes operations performed at mills predominantly in Reading and Latrobe, Pennsylvania, and surrounding areas as well as South Carolina and Alabama. Geographically, the company derives its maximum revenue from the United States and the rest from Europe, Asia Pacific, Mexico, Canada, and other regions.

After a detailed analysis of Carpenter Tech, the following trends become apparent:

• The current Price to Earnings ratio of 38.96 is 1.24x higher than the industry average, indicating the stock is priced at a premium level according to the market sentiment.

• The elevated Price to Book ratio of 7.68 relative to the industry average by 6.1x suggests company might be overvalued based on its book value.

• With a relatively high Price to Sales ratio of 4.78, which is 5.25x the industry average, the stock might be considered overvalued based on sales performance.

• The company has a higher Return on Equity (ROE) of 5.45%, which is 3.59% above the industry average. This suggests efficient use of equity to generate profits and demonstrates profitability and growth potential.

• The company has lower Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) of $170 Million, which is 0.0x below the industry average. This potentially indicates lower profitability or financial challenges.

• Compared to its industry, the company has lower gross profit of $200 Million, which indicates 0.0x below the industry average, potentially indicating lower revenue after accounting for production costs.

• The company is experiencing remarkable revenue growth, with a rate of 6.15%, outperforming the industry average of -6.9%.

Debt To Equity Ratio

The debt-to-equity (D/E) ratio assesses the extent to which a company relies on borrowed funds compared to its equity.

Considering the debt-to-equity ratio in industry comparisons allows for a concise evaluation of a company's financial health and risk profile, aiding in informed decision-making.

When examining Carpenter Tech in comparison to its top 4 peers with respect to the Debt-to-Equity ratio, the following information becomes apparent:

• When comparing the debt-to-equity ratio, Carpenter Tech is in a stronger financial position compared to its top 4 peers.

• The company has a lower level of debt relative to its equity, indicating a more favorable balance between the two with a lower debt-to-equity ratio of 0.39.

Key Takeaways

For Carpenter Tech, the PE, PB, and PS ratios are all high compared to industry peers, indicating potentially overvalued stock. On the other hand, the high ROE and revenue growth suggest strong performance and growth potential. However, the low EBITDA and gross profit may raise concerns about operational efficiency and profitability compared to competitors in the Metals & Mining industry.

This article was generated by Benzinga's automated content engine and reviewed by an editor.