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Insteel Industries (IIIN)
NYSE:IIIN
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Insteel Industries
(NYSE:IIIN)
Rating:75Outperform
Price Target:
$40.00
▲( 12.17% Upside)
Insteel Industries (IIIN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$692.22M
Dividend Yield0.34%
Average Volume (3M)176.06K
Price to Earnings (P/E)30.9
Beta (1Y)1.44
Revenue Growth-0.33%
EPS Growth-7.06%
CountryUS
Employees929
SectorIndustrials
Sector Strength92
IndustryManufacturing - Metal Fabrication
Share Statistics
EPS (TTM)0.52
Shares Outstanding19,411,612
10 Day Avg. Volume125,290
30 Day Avg. Volume176,063
Financial Highlights & Ratios
PEG Ratio1.82
Price to Book (P/B)2.04
Price to Sales (P/S)0.00
P/FCF Ratio16.99
Enterprise Value/Market Cap0.97
Enterprise Value/Revenue0.31
Enterprise Value/Gross Profit10.84
Enterprise Value/Ebitda4.14
Forecast
1Y Price Target
$39.00Price Target Upside9.37% Upside
Rating ConsensusHold
Number of Analyst Covering1
Insteel Industries Business Overview & Revenue Model
Company DescriptionInsteel Industries, Inc., together with its subsidiaries, manufactures and markets steel wire reinforcing products for concrete construction applications. The company offers prestressed concrete strand (PC strand) and welded wire reinforcement (WWR) products. Its PC strand is a seven-wire strand that is used to impart compression forces into precast concrete elements and structures providing reinforcement for bridges, parking decks, buildings, and other concrete structures. The company's WWR engineered reinforcing product is used in nonresidential and residential construction. It produces a range of WWR products, such as engineered structural mesh, an engineered made-to-order product that is used as the primary reinforcement for concrete elements or structures serving as a reinforcing solution for hot-rolled rebar; concrete pipe reinforcement, an engineered made-to-order product, which is used as the primary reinforcement in concrete pipe, box culverts, and precast manholes for drainage and sewage systems, water treatment facilities, and other related applications; and standard welded wire reinforcement, a secondary reinforcing product for crack control applications in residential and light nonresidential construction, including driveways, sidewalks, and various slab-on-grade applications. The company sells its products through sales representatives to the manufacturers of concrete products, rebar fabricators, distributors, and contractors primarily in the United States, Canada, Mexico, and Central and South America. Insteel Industries, Inc. was founded in 1953 and is headquartered in Mount Airy, North Carolina.
How the Company Makes MoneyInsteel Industries generates revenue primarily through the manufacturing and sale of its steel wire reinforcing products. The company's key revenue streams include sales of prestressed concrete strand and welded wire reinforcement, both of which are critical materials used in reinforcing concrete structures. Insteel's financial performance is closely tied to the construction industry's demand, as its products are used in a wide range of applications such as highways, bridges, buildings, and other infrastructure projects. The company may also benefit from strategic partnerships with construction firms and distributors, enabling it to expand its market reach and optimize its supply chain.
Insteel Industries Financial Statement Overview
Summary
Insteel Industries shows a satisfactory financial position with stable operational efficiency and a strong balance sheet. Revenue volatility and moderate profitability margins suggest areas for improvement. The low leverage and high equity ratio highlight financial stability.Income Statement
Insteel Industries has demonstrated a moderate performance in its income statement metrics. The TTM gross profit margin stands at 10.82%, showing a slight improvement from previous years. The net profit margin for the TTM is 3.95%, aligning with industry expectations but indicating room for improvement. Revenue growth has been volatile, with a significant decline of 11.66% in 2023, followed by a more stable period. EBIT and EBITDA margins are 4.85% and 6.67%, respectively, suggesting stable operational efficiency. Overall, the company shows satisfactory operational performance with potential for further profitability improvements.75
Positive
Balance Sheet
The balance sheet reflects strong financial health with a low debt-to-equity ratio of 0.01, indicating minimal leverage and financial risk. Return on Equity (ROE) is relatively low at 6.6% for the TTM, suggesting moderate profitability. The equity ratio of 80.92% shows a solid capital structure with a high proportion of assets funded by equity. The company's strong equity position and low debt levels provide significant financial stability.82
Very Positive
Cash Flow
Cash flow analysis reveals mixed results. The free cash flow growth rate was positive at 4.56% in the TTM, showing resilience in generating cash. However, the operating cash flow to net income ratio of 2.25 indicates strong cash generation relative to accounting profits. The free cash flow to net income ratio of 1.81 further underlines robust cash flow management. Despite these strengths, fluctuations in cash flow from operations suggest potential volatility.68
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 570.46M | 529.20M | 649.19M | 826.83M | 590.60M | 472.62M | Gross Profit |
| 61.70M | 49.63M | 65.40M | 197.31M | 121.55M | 55.79M | EBIT |
| 27.67M | 20.04M | 34.71M | 161.50M | 89.07M | 26.17M | EBITDA |
| 42.23M | 40.79M | 55.15M | 176.30M | 100.72M | 38.53M | Net Income Common Stockholders |
| 22.55M | 19.30M | 32.41M | 125.01M | 66.61M | 19.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 83.94M | 111.54M | 125.67M | 48.32M | 89.88M | 68.69M | Total Assets |
| 397.23M | 422.55M | 447.51M | 471.75M | 390.71M | 337.90M | Total Debt |
| 2.25M | 1.69M | 1.94M | 1.57M | 1.73M | 2.53M | Net Debt |
| -81.69M | -109.85M | -123.73M | -46.75M | -88.16M | -66.16M | Total Liabilities |
| 56.61M | 71.70M | 66.01M | 82.00M | 88.67M | 73.10M | Stockholders Equity |
| 340.62M | 350.86M | 381.50M | 389.74M | 302.04M | 264.80M |
| Cash Flow | Free Cash Flow | ||||
| 40.84M | 39.06M | 111.50M | -10.23M | 52.38M | 49.11M | Operating Cash Flow |
| 50.66M | 58.21M | 142.20M | 5.67M | 69.88M | 56.22M | Investing Cash Flow |
| -81.39M | -19.64M | -20.90M | -6.04M | -17.80M | -23.17M | Financing Cash Flow |
| -24.79M | -52.70M | -43.95M | -41.20M | -30.88M | -2.54M |
Insteel Industries Technical Analysis
Positive
35.66
Price Trends
30.62
Positive
29.21
Positive
29.29
Positive
Market Momentum
1.72
Positive
61.13
Neutral
33.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IIIN, the sentiment is Positive. The current price of 35.66 is above the 20-day moving average (MA) of 35.42, above the 50-day MA of 30.62, and above the 200-day MA of 29.29, indicating a bullish trend. The MACD of 1.72 indicates Positive momentum. The RSI at 61.13 is Neutral, neither overbought nor oversold. The STOCH value of 33.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IIIN.
Insteel Industries Risk Analysis
Insteel Industries disclosed 15 risk factors in its most recent earnings report. Insteel Industries reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Insteel Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $692.22M | 30.92 | 6.61% | 0.34% | -0.33% | -7.06% | |
74 Outperform | $8.42B | 13.87 | 24.51% | 1.12% | 18.81% | 10.05% | |
69 Neutral | $310.60M | 14.06 | 9.40% | ― | -8.42% | 164.82% | |
67 Neutral | $393.49M | 12.17 | 9.13% | ― | 8.06% | 38.46% | |
66 Neutral | $2.87B | 48.16 | 6.56% | 1.16% | -69.82% | -78.10% | |
64 Neutral | $4.39B | 11.81 | 5.20% | 249.38% | 3.96% | -12.36% | |
58 Neutral | $678.69M | 37.86 | -0.78% | 3.56% | -9.04% | -108.47% |
* Industrials Sector Average
Performance Comparison
IIIN
Insteel Industries
35.66
4.80
15.55%
MLI
Mueller Industries
75.86
17.48
29.94%
NWPX
Northwest Pipe Company
39.84
4.77
13.60%
WOR
Worthington Industries
57.59
1.48
2.64%
RYI
Ryerson Holdings
20.82
-2.85
-12.04%
MEC
Mayville Engineering Company
15.16
-0.23
-1.49%
Insteel Industries Earnings Call Summary
Earnings Call Date:Apr 17, 2025
(Q2-2025)
| % Change Since: 33.46%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Positive
The earnings call presented significant positive aspects, including strong net earnings growth, successful asset integration, and improved liquidity. However, concerns about supply chain constraints, potential tariff impacts, and challenging macroeconomic indicators were also highlighted. Despite these concerns, the positive highlights, particularly in financial performance and strategic moves, were more pronounced.Q2-2025 Updates
Positive Updates
Strong Quarter Performance
Net earnings for the quarter rose to $10.2 million from $6.9 million a year ago, and earnings per share increased to $0.52 per diluted share from $0.35 per diluted share in the prior year. Excluding nonrecurring restructuring charges, net earnings rose to $0.55 per share. Shipments for the quarter increased 28.9% from last year and 17.9% sequentially from Q1.
Successful Integration of Acquired Assets
Effective integration of acquired assets during the first fiscal quarter was completed successfully, contributing to increased tonnage and improved shipment performance.
Ample Liquidity and Financial Flexibility
Ended the quarter with $28.4 million of cash on hand and no borrowing outstanding on a $100 million revolving credit facility.
Positive Impact of Tariff Changes
Application of the 25% Section 232 steel tariff to imports of PC strand and other derivative products has eliminated a previous competitive disadvantage for Insteel.
Negative Updates
Supply Chain and Raw Material Concerns
Uncertainties surrounding adequate supplies of wire rod remain, with commitments to import substantial quantities due to domestic supply constraints.
Tariff Strategy Risks
Potential economic fallout from the Trump administration's tariff strategy and reciprocal tariffs could impact Insteel, particularly concerning purchases of capital equipment, spare parts, and operating supplies.
Challenging Macroeconomic Indicators
Architectural Billing Index at 45.5% below growth threshold of 50%, and Dodge Momentum Index saw a decrease of 6.9% in March, indicating a challenging outlook for business conditions.
Company Guidance
During the Insteel Industries 2nd Quarter 2025 earnings call, the company reported a significant improvement in financial performance compared to the previous year, with net earnings rising to $10.2 million from $6.9 million, and earnings per share increasing to $0.52 per diluted share from $0.35. Excluding nonrecurring restructuring charges, net earnings per share stood at $0.55. Shipment volumes increased by 28.9% year-over-year and 17.9% sequentially from the first quarter, driven by strong demand in construction markets and contributions from recent acquisitions. The effective tax rate for the quarter was 23.2%, and capital expenditures were reduced to a full-year target of $17 million from the previously communicated $22 million. The company repurchased $1.1 million of its common equity, ending the quarter with $28.4 million in cash and no borrowings on its $100 million revolving credit facility. Despite uncertainties surrounding trade policies, the company remains optimistic about market outlook, supported by robust demand and shipment trends.Insteel Industries Corporate Events
Dividends
Insteel Industries Declares Quarterly Cash Dividend
Positive
May 22, 2025
On May 22, 2025, Insteel Industries Inc. announced that its Board of Directors declared a regular quarterly cash dividend of $0.03 per share of common stock. This dividend is payable on June 27, 2025, to shareholders recorded by June 13, 2025. The announcement reflects Insteel’s ongoing commitment to providing shareholder value and could impact investor sentiment positively, reinforcing its stable financial positioning within the industry.
The most recent analyst rating on (IIIN) stock is a Hold with a $34.00 price target. To see the full list of analyst forecasts on Insteel Industries stock, see the IIIN Stock Forecast page.
Executive/Board ChangesBusiness Operations and Strategy
Insteel Industries Expands Board with New Appointment
Positive
Feb 28, 2025
On February 28, 2025, Insteel Industries Inc. announced the appointment of Eric J. Zernikow to its board of directors, expanding the board to nine members. Mr. Zernikow, with extensive experience at Nucor Corporation, will serve on the Executive Compensation and Nominating and Governance Committees. His appointment is expected to enhance the board’s commercial and operational expertise, potentially benefiting Insteel’s strategic direction and stakeholder interests.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.