Insteel Industries, Inc. (IIIN) | Investment Case

1. Company Snapshot

1.a. Company Description

Insteel 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.

Show Full description

1.b. Last Insights on IIIN

Recent negative drivers behind Insteel Industries' performance include competitive pricing pressures and lower raw material costs, which continue to impact margins. Despite Q1 2025 earnings beating estimates, the company's revenue growth was driven by acquisitions and increased shipments, but margins remain a concern. Additionally, the company faces challenges in maintaining its growth trajectory, as seen in its recent weaker performance.

1.c. Company Highlights

Last Price	31.67
Change Percentage	0.83%
Open	31.36
Previous Close	31.41
Market Cap ( Millions)	615
Volume	73184
Year High	41.64
Year Low	22.49
M A 50	33.05
M A 200	33.84

FCF Yield	3.08%
Dividend Yield	3.54%
ROE	11.71%
Debt / Equity	4.17%
Net Debt / EBIDTA	-34.02%
Price To Book	1.66
Price Earnings Ratio	15.04
Price To FCF	32.44
Price To sales	0.95
EV / EBITDA	8.7

2. Insteel Industries' Strong Q4 2025 Earnings Driven by Higher Shipment Volumes and Wider Spreads

Insteel Industries reported a strong fourth quarter performance, with net earnings rising to $14.6 million or 74¢ per diluted share, compared to $4.7 million or $0.24 per share during the same period last year. The company's quarterly shipments increased 9.8% year over year, driven by contributions from recent acquisitions and stronger demand across nonresidential construction markets. Average selling prices for the quarter rose 20.3% year over year and 4.7% sequentially from Q3, reflecting continued pricing momentum. The actual EPS came out at $0.74, slightly below estimates of $0.75.

Publication Date: Nov -16

                                    📋 Highlights
                                    Net Earnings Surge::
                                                Increased to $14.6 million (74¢ per diluted share) in Q4 2025 from $4.7 million ($0.24/share) in Q4 2024.
Shipment Growth::
                                                Quarterly shipments rose 9.8% YoY, driven by acquisitions and nonresidential construction demand.
Gross Margin Expansion::
                                                Improved 700 bps to 16.1% ($28.6 million gross profit), with pricing outpacing raw material costs.
Capital Investment Plan::
                                                $20 million allocated in 2026 for plants and information systems to boost product offerings and reduce costs.
Tariff Exposure::
                                                50% of raw material import costs impacted by Section 232 tariffs on steel and aluminum.

                                

Financial Performance

The company's gross profit for the quarter rose $16.3 million year over year to $28.6 million, with gross margin improving by 700 basis points to 16.1%. The increase was largely attributed to wider spreads as higher average selling prices more than offset the rise of raw material costs. According to Scot R. Jafroodi, the strong fourth quarter results were driven by higher shipment volumes and a continued recovery in spreads between selling prices and raw material costs.

Valuation Metrics

With a P/E Ratio of 15.16 and an EV/EBITDA of 8.78, the company's valuation appears reasonable. Additionally, the Dividend Yield is 3.51%, indicating a relatively attractive return for investors. Analysts estimate next year's revenue growth at 12.1%, which could potentially drive the stock price higher.

Business Outlook

Howard Osler Woltz mentioned that the demand recovery is real, despite not being reflected in broader macroeconomic indicators. The company expects to invest approximately $20 million in its plants and information systems infrastructure during 2026, aiming to broaden its product offering, reduce its cash production cost, and enhance the robust nature of its information systems.

Tariff Policy Impact

Insteel is affected by tariffs in two ways: the Section 232 tariff on steel and aluminum, which is 25% of the value on all raw material imports purchased by Insteel, and the impact on imported goods subject to reciprocal tariffs. The company's management is cautious about the potential impact of tariffs on its business.

Residential Demand

Woltz noted that residential demand remains soft, comprising around 15% of sales. The company has acquired Engineered Wire Products (EWP), which has reduced this portion of sales. However, it's difficult to pinpoint the exact end markets for Insteel's products, as they can be used in infrastructure projects related to housing developments.

3. NewsRoom

Yousif Capital Management LLC Takes Position in Insteel Industries, Inc. $IIIN

Oct -24

Source: defenseworld.net

Why Insteel Industries Stock Plummeted Today

Oct -16

Source: fool.com

Insteel Industries, Inc. (IIIN) Q4 2025 Earnings Call Transcript

Oct -16

Source: seekingalpha.com

Insteel Industries (IIIN) Lags Q4 Earnings and Revenue Estimates

Oct -16

Source: zacks.com

Insteel Industries Announces Fourth Quarter 2025 Conference Call

Sep -16

Source: businesswire.com

Is Insteel Industries (IIIN) Stock Outpacing Its Industrial Products Peers This Year?

Sep -03

Source: zacks.com

New Strong Buy Stocks for July 23rd

Jul -23

Source: zacks.com

Insteel Industries Fiscal Q3 Profit Jumps

Jul -17

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.63%)

6. Segments

Welded Wire Reinforcement

Expected Growth: 4.5%

Growing demand for high-strength, corrosion-resistant reinforcement solutions in concrete construction, driven by increasing infrastructure development, urbanization, and focus on sustainable building practices.

Prestressed Concrete Strand

Expected Growth: 4.8%

Growing demand for infrastructure development, increasing adoption of prestressed concrete in construction, and rising need for sustainable and durable building materials drive the growth of the prestressed concrete strand market.

7. Detailed Products

PC Strand

A high-strength, low-relaxation wire strand used in prestressed concrete construction

Prestressed Concrete Wire

A high-strength wire used in the production of prestressed concrete products

Galvanized Welded Wire

A corrosion-resistant wire mesh used in a variety of applications

Electrical Fence Wire

A durable, corrosion-resistant wire used for electrical fencing applications

Fence Wire

A durable, corrosion-resistant wire used for fencing applications

8. Insteel Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Insteel Industries, Inc. faces moderate threat from substitutes due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

Insteel Industries, Inc. has a diverse customer base, which reduces the bargaining power of individual customers, giving the company an upper hand in negotiations.

Bargaining Power Of Suppliers

Insteel Industries, Inc. relies on a few large suppliers for raw materials, giving them some bargaining power, but the company's size and scale also provide it with some negotiating leverage.

Threat Of New Entrants

The wire products industry has high barriers to entry, including significant capital requirements and regulatory hurdles, making it difficult for new entrants to challenge Insteel Industries, Inc.'s market position.

Intensity Of Rivalry

The wire products industry is highly competitive, with several established players competing for market share, leading to a high intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	0.50%
Debt Cost	5.79%
Equity Weight	99.50%
Equity Cost	9.69%
WACC	9.67%
Leverage	0.51%

11. Quality Control: Insteel Industries, Inc. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Ennis

A-Score: 6.7/10

Value: 7.2

Growth: 4.1

Quality: 7.2

Yield: 10.0

Momentum: 2.5

Volatility: 9.0

1-Year Total Return ->

Insteel Industries

A-Score: 6.5/10

Value: 5.3

Growth: 4.3

Quality: 6.2

Yield: 9.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

Mueller Industries

A-Score: 6.3/10

Value: 4.5

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

Northwest Pipe

A-Score: 5.2/10

Value: 6.2

Growth: 6.6

Quality: 5.1

Yield: 0.0

Momentum: 7.0

Volatility: 6.3

1-Year Total Return ->

CompoSecure

A-Score: 4.5/10

Value: 6.5

Growth: 0.9

Quality: 5.6

Yield: 1.0

Momentum: 9.0

Volatility: 4.0

1-Year Total Return ->

Mayville Engineering Company

A-Score: 4.2/10

Value: 7.1

Growth: 7.4

Quality: 5.8

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

13.97%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.67%

Insteel Industries, Inc. - US45774W1080

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on IIIN

1.c. Company Highlights

Higher Yield

Average Growth

Average Quality

Earnings Beats

Revenues Miss

Earnings Miss

Stable Momentum

Weak Momentum

Fairly Valued

Revenues Beats

Medium Volatility

Strong Momentum

2. Insteel Industries' Strong Q4 2025 Earnings Driven by Higher Shipment Volumes and Wider Spreads

Financial Performance

Valuation Metrics

Business Outlook

Tariff Policy Impact

Residential Demand

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.63%)

6. Segments

Welded Wire Reinforcement

Expected Growth: 4.5%

Prestressed Concrete Strand

Expected Growth: 4.8%

7. Detailed Products

PC Strand

Prestressed Concrete Wire

Galvanized Welded Wire

Electrical Fence Wire

Fence Wire

8. Insteel Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Insteel Industries, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

31.67$

Current Price

31.67$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA