Worthington Steel, Inc.

Basic MaterialsSteelNYSE

$40.30

Market Cap: $2.05B

Worthington Steel, Inc. (WS) Valuation Summary

Updated Apr 6, 2026 22:29

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Growth Exit 5Y	$36.46 – $119.21	$55.99	+85.6%
Growth Exit 10Y	$35.60 – $108.94	$53.12	+76.1%
EBITDA Exit 5Y	$46.86 – $95.85	$69.34	+129.8%
EBITDA Exit 10Y	$47.11 – $102.44	$70.74	+134.5%
▸ Trading Multiples
P/E	$29.18 – $88.66	$50.29	+66.7%
EV/EBITDA	$40.89 – $77.02	$60.08	+99.1%
EV/Revenue	$45.50 – $163.21	$88.99	+195.0%
▸ PEG
PEG Fair Value	$17.52 – $17.52	$17.52	-41.9%
▸ Earnings Power Value
Earnings Power Value	$26.11 – $39.60	$31.62	+4.8%
▸ Dividend Discount
Dividend Discount	$7.29 – $16.40	$10.38	-65.6%

Valuation History

DCF Analysis

Fair Value

$55.99

Market Price

$40.30

Upside / Downside

+38.9%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Worthington Steel, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 14.9% to 0.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 58, DIO 60). At a 8.2% WACC with mid-year discounting, the terminal value (78% of enterprise value) is derived from the Gordon Growth Model on Year 6 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $55.99 per share, suggesting WS is undervalued by 38.9% at the current price of $40.30.

FCFF Present Value Calculation

WACC

8.16%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	216	222	234	229	231	236
(−) Net Interest	4	4	4	4	4	4
(+) D&A	69	78	87	94	90	92
EBITDA	289	305	325	327	325	333

(−) Tax	45	47	49	48	48	50
(−) CapEx	76	79	83	81	82	84
(−) ΔWC	94	17	30	-14	5	5
Free Cash Flow (FCFF)	73	162	163	212	190	194

Terminal Value						3,432
WACC / Discount Rate	8.2%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	70	144	134	161	133	2,318

Enterprise Value	2,961
Projection Period	643	21.7%
Terminal Value	2,318	78.3%

(−) Current Net Debt	190

Equity Value	2,771
(/) Outstanding Shares	50

Fair Price	$55.99

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.2%	$72	$80	$89	$102	$119
7.2%	$59	$63	$69	$76	$85
8.2%	$49	$52	$56	$61	$66
9.2%	$42	$44	$47	$50	$54
10.2%	$36	$38	$40	$42	$45

Current price: $40.30. Green = undervalued, Red = overvalued.

Fair Value

$53.12

Market Price

$40.30

Upside / Downside

+31.8%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Worthington Steel, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 14.9% to 4.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 58, DIO 60). At a 8.2% WACC with mid-year discounting, the terminal value (60% of enterprise value) is derived from the Gordon Growth Model on Year 11 FCFF at a 2.5% perpetual rate. After subtracting net debt, the equity value implies a fair price of $53.12 per share, suggesting WS is undervalued by 31.8% at the current price of $40.30.

FCFF Present Value Calculation

WACC

8.16%

3% – 20%

Terminal Growth

2.50%

0% – 6%

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	216	222	234	229	231	251	269	287	302	314	322
(−) Net Interest	4	4	4	4	4	5	5	5	6	6	6
(+) D&A	69	78	87	94	90	80	83	86	90	95	97
EBITDA	289	305	325	327	325	335	357	378	397	415	425

(−) Tax	45	47	49	48	48	53	57	60	63	66	68
(−) CapEx	76	79	83	81	82	89	95	101	107	111	114
(−) ΔWC	94	17	30	-14	5	51	48	44	39	32	33
Free Cash Flow (FCFF)	73	162	163	212	190	143	157	172	188	206	211

Terminal Value											3,725
WACC / Discount Rate	8.2%
Long-term Growth Rate	2.5%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	70	144	134	161	133	93	94	96	97	98	1,700

Enterprise Value	2,819
Projection Period	1,119	39.7%
Terminal Value	1,700	60.3%

(−) Current Net Debt	190

Equity Value	2,629
(/) Outstanding Shares	50

Fair Price	$53.12

Sensitivity Analysis

WACC \ Terminal Growth Rate	1.5%	2.0%	2.5%	3.0%	3.5%
6.2%	$71	$77	$85	$95	$109
7.2%	$57	$61	$66	$71	$78
8.2%	$48	$50	$53	$56	$60
9.2%	$41	$43	$44	$47	$49
10.2%	$36	$37	$38	$40	$41

Current price: $40.30. Green = undervalued, Red = overvalued.

Fair Value

$69.33

Market Price

$40.30

Upside / Downside

+72.0%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Worthington Steel, Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 14.9% to 0.9% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 58, DIO 60). At a 8.2% WACC with mid-year discounting, the terminal value (82% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.3x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $69.34 per share, suggesting WS is undervalued by 72.1% at the current price of $40.30.

FCFF Present Value Calculation

WACC

8.16%

3% – 20%

EV/EBITDA Exit Multiple

13.25x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	Terminal
Profit Before Tax	216	222	234	229	231	236
(−) Net Interest	4	4	4	4	4	4
(+) D&A	69	78	87	94	90	92
EBITDA	289	305	325	327	325	333

(−) Tax	45	47	49	48	48	—
(−) CapEx	76	79	83	81	82	—
(−) ΔWC	94	17	30	-14	5	—
Free Cash Flow (FCF)	73	162	163	212	190	—

Peers' EBITDA Multiple						13.3x
Terminal Value						4,410
WACC / Discount Rate	8.16%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5
Present Value of FCF	70	144	134	161	133	2,979

Enterprise Value	3,622
Projection Period	643	17.8%
Terminal Value	2,979	82.2%

(−) Current Net Debt	190
Equity Value	3,432
(÷) Outstanding Shares	50M
Fair Price	$69	+72.0%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.3x	11.3x	13.3x	15.3x	17.3x
6.2%	$56	$66	$76	$86	$96
7.2%	$54	$63	$73	$82	$92
8.2%	$51	$60	$69	$78	$88
9.2%	$49	$58	$66	$75	$84
10.2%	$47	$55	$63	$72	$80

Current price: $40.30. Green = undervalued, Red = overvalued.

Based on default parameters

Fair Value

$70.73

Market Price

$40.30

Upside / Downside

+75.5%

Verdict

Undervalued

Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Worthington Steel, Inc.'s cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 14.9% to 4.1% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 55, DPO 58, DIO 60). At a 8.2% WACC with mid-year discounting, the terminal value (70% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 13.3x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $70.74 per share, suggesting WS is undervalued by 75.5% at the current price of $40.30.

FCFF Present Value Calculation

WACC

8.16%

3% – 20%

EV/EBITDA Exit Multiple

13.25x

1x – 40x

Forecast Period

5 Yrs

+ Terminal Year

Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.

Currency: USD Millions

	2026	2027	2028	2029	2030	2031	2032	2033	2034	2035	Terminal
Profit Before Tax	216	222	234	229	231	251	269	287	302	314	322
(−) Net Interest	4	4	4	4	4	5	5	5	6	6	6
(+) D&A	69	78	87	94	90	80	83	86	90	95	97
EBITDA	289	305	325	327	325	335	357	378	397	415	425

(−) Tax	45	47	49	48	48	53	57	60	63	66	—
(−) CapEx	76	79	83	81	82	89	95	101	107	111	—
(−) ΔWC	94	17	30	-14	5	51	48	44	39	32	—
Free Cash Flow (FCF)	73	162	163	212	190	143	157	172	188	206	—

Peers' EBITDA Multiple											13.3x
Terminal Value											5,636
WACC / Discount Rate	8.16%

Timing of FCF (mid year)	0.5	1.5	2.5	3.5	4.5	5.5	6.5	7.5	8.5	9.5	5
Present Value of FCF	70	144	134	161	133	93	94	96	97	98	2,572

Enterprise Value	3,691
Projection Period	1,119	30.3%
Terminal Value	2,572	69.7%

(−) Current Net Debt	190
Equity Value	3,501
(÷) Outstanding Shares	50M
Fair Price	$71	+75.5%

Sensitivity Analysis

WACC \ EV/EBITDA Exit Multiple	9.3x	11.3x	13.3x	15.3x	17.3x
6.2%	$65	$74	$84	$93	$102
7.2%	$60	$68	$77	$85	$94
8.2%	$55	$63	$71	$79	$86
9.2%	$51	$58	$65	$72	$80
10.2%	$47	$54	$60	$67	$73

Current price: $40.30. Green = undervalued, Red = overvalued.

Based on default parameters

Trading Multiples

Fair Value

$50.29

Market Price

$40.30

Upside / Downside

+24.8%

Verdict

Undervalued

Using the industry peer median P/E Multiples multiple (trailing + forward), Worthington Steel, Inc. (WS) has a fair value of $50.29 based on 3 comparable companies in the Steel industry.

P/E Valuation — Steel

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing P/E	Forward P/E
Worthington Steel, Inc.WS	1,995	18.4x	17.8x
Silvercorp Metals Inc.SVM	2,451	39.6x	27.6x
Kaiser Aluminum CorporationKALU	2,114	19.3x	50.3x
Sylvamo CorporationSLVM	1,660	13.0x	7.5x
Industry Median		19.3x	27.6x
(*) Profit after tax		111	112
Equity Value		2,132	2,846
(/) Outstanding shares		50	50
Fair Price		$43	$58

Selected Fair Value (avg of trailing + forward)

$50.29

+24.8%

Fair Value

$60.08

Market Price

$40.30

Upside / Downside

+49.1%

Verdict

Undervalued

Using the industry peer median EV/EBITDA multiple (trailing + forward), Worthington Steel, Inc. (WS) has a fair value of $60.08 based on 6 comparable companies in the Steel industry.

EV/EBITDA Valuation — Steel

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/EBITDA	Forward EV/EBITDA
Worthington Steel, Inc.WS	1,995	9.9x	8.6x
Allied Gold CorporationAAUC	3,870	11.1x	11.3x
Silvercorp Metals Inc.SVM	2,451	15.4x	15.4x
Huntsman CorporationHUN	2,182	18.1x	17.1x
Minerals Technologies Inc.MTX	2,121	20.0x	19.3x
Kaiser Aluminum CorporationKALU	2,114	10.0x	11.2x
Sylvamo CorporationSLVM	1,660	5.7x	5.2x
Industry Median		13.3x	13.4x
(*) EBITDA		221	254
= Enterprise Value		2,931	3,397
(-) Net Debt		190	190
Equity Value		2,741	3,207
(/) Outstanding shares		50	50
Fair Price		$55	$65

Selected Fair Value (avg of trailing + forward)

$60.08

+49.1%

Fair Value

$88.99

Market Price

$40.30

Upside / Downside

+120.8%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Worthington Steel, Inc. (WS) has a fair value of $88.99 based on 7 comparable companies in the Steel industry.

EV/Revenue Valuation — Steel

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Worthington Steel, Inc.WS	1,995	0.7x	0.6x
Allied Gold CorporationAAUC	3,870	2.7x	2.7x
Silvercorp Metals Inc.SVM	2,451	7.4x	7.4x
Huntsman CorporationHUN	2,182	0.8x	0.7x
FMC CorporationFMC	2,152	1.7x	1.5x
Minerals Technologies Inc.MTX	2,121	1.4x	1.3x
Kaiser Aluminum CorporationKALU	2,114	1.0x	1.1x
Sylvamo CorporationSLVM	1,660	0.7x	0.6x
Industry Median		1.4x	1.3x
(*) Revenue		3,093	3,554
= Enterprise Value		4,235	4,955
(-) Net Debt		190	190
Equity Value		4,045	4,765
(/) Outstanding shares		50	50
Fair Price		$82	$96

Selected Fair Value (avg of trailing + forward)

$88.99

+120.8%

PEG Fair Value

Fair Value

$17.52

Market Price

$40.30

Upside / Downside

-56.5%

Verdict

Overvalued

Using the PEG framework with historical EPS growth of 8.0% plus 2.1% dividend yield, the company has a fair value of $17.52 based on TTM EPS (FY2025) of $2.19.

PEG Ratio

PEG ratio unavailable — requires positive earnings and growth data.

Fair Value Calculation

EPS Growth RateHistorical	-10.5%
Dividend Yield	+2.1%
Adjusted Growth (clamped 8–25%)Clamped	8.0%
Fair P/E	8.0x
TTM EPS (FY2025)	$2.19
Fair Value	$17.52

Growth Analysis

Forward Growth

No analyst estimates available.

Historical GrowthActive

Year	Net Income	EPS	YoY
FY2021	$171.0M	$3.42	—
FY2022	$180.4M	$3.66	+7.0%
FY2023	$87.1M	$1.77	-51.6%
FY2024	$154.7M	$3.11	+75.7%
FY2025	$110.7M	$2.19	-29.6%

4Y Historical EPS CAGR: -10.5%

Earnings Power Value

Fair Value

$31.62

Market Price

$40.30

Upside / Downside

-21.5%

Verdict

Overvalued

Using the Earnings Power Value framework with a WACC of 8.2% and normalized earnings of $143.2M, the company has a fair value of $31.62 per share. The EPV range is $26.11 – $39.60 based on WACC sensitivity (6.7% – 9.7%).

Currency: USD Millions

	Low	Selected	High
Normalized Earnings	143	143	143
(/) WACC	9.7%	8.2%	6.7%
Enterprise Value	1,482	1,755	2,150
(-) Net debt	190	190	190
Equity Value	1,293	1,565	1,960
(/) Outstanding shares	50	50	50
Fair Price	$26.11	$31.62	$39.60

Dividend Discount Model

Fair Value

$10.38

Market Price

$40.30

Upside / Downside

-74.2%

Verdict

Overvalued

Using the Two-Stage Dividend Discount Model with a Cost of Equity of 9.0% and projected dividend growth of 3.0%, the fair value is $10.38 per share. The DDM range is $7.29 – $16.40 based on sensitivity analysis across Cost of Equity and growth rate assumptions.

Dividend Profile

Current DPS

$0.64

Dividend Yield

2.08%

Payout Ratio

28.8%

Dividend Coverage

3.47x

FCF Payout Ratio31.9%

Historical Dividends Per Share

Year	DPS	Payout Ratio	YoY Growth
2025	$0.64	28.8%	+306.2%
2024	$0.16	5.1%	—
2023	—	0.0%	—
2022	—	0.0%	—
2021	—	0.0%	—

Dividend Projections (5-Year)

Year	Projected DPS	Growth	Discount Factor	Present Value
2026	$0.66	3.0%	0.9174	$0.61
2027	$0.68	3.0%	0.8417	$0.58
2028	$0.70	3.0%	0.7721	$0.54
2029	$0.73	3.0%	0.7084	$0.51
2030	$0.75	3.0%	0.6499	$0.49
Terminal Value	$0.77 DPS	2.5%		$7.65

PV of Projected Dividends$2.73

PV of Terminal Value$7.65

Fair Value per Share$10.38

Sensitivity Analysis

Fair value under different Cost of Equity (rows) and DPS Growth Rate (columns) assumptions.

Ke \ Growth	1.0%	2.0%	3.0%	4.0%	5.0%
7.0%	$14	$14	$15	$16	$16
8.0%	$11	$12	$12	$13	$13
9.0%	$10	$10	$10	$11	$11
10.0%	$8	$9	$9	$9	$10
11.0%	$7	$8	$8	$8	$9

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.