Steel Connect, Inc. (STCN) | Investment Case

1. Company Snapshot

1.a. Company Description

Steel Connect, Inc., together with its subsidiaries, provides direct marketing and supply chain services in the United States, Mainland China, and internationally.The company provides data-driven marketing solutions, including strategy, data and analytics, response analysis, creative services, lithographic and digital printing, envelope printing and converting, component manufacturing, promotional cards, data processing and hygiene, content and asset management, personalization, lettershop and bindery, and postal optimization and omnichannel marketing campaigns, as well as provides business continuity and disaster recovery services.It also offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services.

In addition, the company provides fulfillment services comprising order management, pick, pack and ship, retail compliance, and demand planning services; and reverse logistics services that simplifies the returns process for retailers and manufacturers, as well as operates a cloud-based e-commerce platform.Steel Connect, Inc.offers its supply chain services to customers in the consumer electronics, communications, computing, medical devices, software, and retail markets.

The company was formerly known as ModusLink Global Solutions, Inc.and changed its name to Steel Connect, Inc.in February 2018.

Steel Connect, Inc.was incorporated in 1986 and is headquartered in Smyrna, Tennessee.

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1.b. Last Insights on STCN

Steel Connect's recent performance was driven by strong Q1 fiscal 2025 financial results, with net revenue increasing 22% year-over-year to $50.5 million, and adjusted EBITDA margin expanding to 14.6% from 8.0%. The company's merger with Steel Partners Holdings L.P. also appears to be a positive catalyst, as multiple law firms have initiated investigations into the deal, suggesting potential upside for shareholders.

1.c. Company Highlights

Last Price	12.18
Change Percentage	-2.33%
Open	12.44
Previous Close	12.47
Market Cap ( Millions)	77
Volume	271995
Year High	13.0
Year Low	7.36
M A 50	11.53
M A 200	11.56

FCF Yield	21.74%
Dividend Yield	0.00%
ROE	2.86%
Debt / Equity	7.04%
Net Debt / EBIDTA	-1728.77%
Price To Book	0.49
Price Earnings Ratio	9.73
Price To FCF	4.6
Price To sales	0.8
EV / EBITDA	-11.3

2. Transcript Summary

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3. NewsRoom

Steel Connect, Inc. (STCN) Investigation: Bronstein, Gewirtz & Grossman, LLC Encourages Investors to Contact the Firm to Learn More About the Investigation

Jan -15

Source: accesswire.com

Bronstein, Gewirtz & Grossman, LLC Encourages Steel Connect, Inc. (STCN) Shareholders to Inquire about Securities Investigation

Jan -12

Source: accesswire.com

Bronstein, Gewirtz & Grossman, LLC Is Investigating Steel Connect, Inc. (STCN) And Encourages Shareholders to Connect

Jan -08

Source: accesswire.com

The Schall Law Firm Invites Shareholders With Losses To Join An Inquiry Into Steel Connect, Inc. For Securities Fraud

Jan -05

Source: accesswire.com

Bronstein, Gewirtz & Grossman, LLC Initiates an Investigation into Allegations Against Steel Connect, Inc. (STCN) And Encourages Shareholders to Reach Out

Jan -05

Source: accesswire.com

Steel Connect Inc Is Being Investigated For Securities Law Violations And Impacted Investors Are Urged To Contact The Schall Law Firm

Jan -04

Source: accesswire.com

The Schall Law Firm Invites Shareholders With Losses To Join An Inquiry Into Steel Connect Inc For Securities Fraud

Jan -03

Source: accesswire.com

Steel Connect, Inc. Is Being Investigated For Securities Law Violations And Impacted Investors Are Urged To Contact The Schall Law Firm

Jan -02

Source: accesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Supply Chain

Expected Growth: 8.5%

Growing demand for steel products, increasing adoption of digital supply chain management, and rising need for efficient logistics and procurement processes drive the growth of Steel Connect, Inc.'s business.

7. Detailed Products

SteelConnect SD-WAN

A software-defined wide area networking (SD-WAN) solution that enables secure, agile, and optimized WAN connectivity for distributed enterprises.

SteelHead WAN Optimization

A WAN optimization solution that accelerates application performance, reduces bandwidth consumption, and improves user experience.

SteelFusion Edge IT

A converged infrastructure solution that integrates compute, storage, and networking resources at the edge.

SteelConnect EX Series

A series of network appliances that provide secure, scalable, and manageable WAN connectivity for distributed enterprises.

SteelConnect CX Series

A series of cloud-based WAN optimization and security solutions that provide secure, agile, and optimized WAN connectivity.

8. Steel Connect, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Steel Connect, Inc. faces moderate threat from substitutes due to the availability of alternative materials and products.

Bargaining Power Of Customers

Steel Connect, Inc. has a large customer base, but the bargaining power of customers is high due to the availability of alternative suppliers.

Bargaining Power Of Suppliers

Steel Connect, Inc. has a diversified supplier base, reducing the bargaining power of suppliers.

Threat Of New Entrants

The threat of new entrants in the steel industry is moderate due to the high capital requirements and regulatory barriers.

Intensity Of Rivalry

The steel industry is highly competitive, with many established players, 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	11.45%
Debt Cost	5.14%
Equity Weight	88.55%
Equity Cost	5.14%
WACC	5.14%
Leverage	12.92%

11. Quality Control: Steel Connect, Inc. passed 5 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

Deluxe

A-Score: 5.8/10

Value: 7.9

Growth: 3.3

Quality: 4.6

Yield: 9.0

Momentum: 5.0

Volatility: 4.7

1-Year Total Return ->

Steel Connect

A-Score: 5.6/10

Value: 9.3

Growth: 4.7

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

Townsquare Media

A-Score: 5.5/10

Value: 9.3

Growth: 3.7

Quality: 4.6

Yield: 9.0

Momentum: 1.0

Volatility: 5.3

1-Year Total Return ->

Emerald Holding

A-Score: 4.4/10

Value: 4.2

Growth: 2.9

Quality: 6.5

Yield: 1.0

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

Inuvo

A-Score: 4.1/10

Value: 6.2

Growth: 3.9

Quality: 4.5

Yield: 0.0

Momentum: 9.0

Volatility: 1.0

1-Year Total Return ->

Harte Hanks

A-Score: 3.8/10

Value: 9.2

Growth: 1.1

Quality: 4.3

Yield: 0.0

Momentum: 5.0

Volatility: 3.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-12.79%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

5.14%

Steel Connect, Inc. - US8580982051

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on STCN

1.c. Company Highlights

Strong Momentum

Cheaper

Better Quality

Average Yield

Stable Momentum

Medium Volatility

Average Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.50%)

6. Segments

Supply Chain

Expected Growth: 8.5%

7. Detailed Products

SteelConnect SD-WAN

SteelHead WAN Optimization

SteelFusion Edge IT

SteelConnect EX Series

SteelConnect CX Series

8. Steel Connect, 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: Steel Connect, Inc. passed 5 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

12.18$

Current Price

12.18$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA