Universal Stainless & Alloy Products, Inc. (USAP) | Investment Case

1. Company Snapshot

1.a. Company Description

Universal Stainless & Alloy Products, Inc., together with its subsidiaries, manufactures and markets semi-finished and finished specialty steel products in the United States and internationally.Its products include stainless steel, nickel alloys, tool steel, and various other alloyed steels.The company offers semi-finished and finished long products in the form of ingots, billets, and bars; flat rolled products, such as slabs and plates; and customized shapes primarily for original equipment manufacturers (OEMs), which are cold rolled from purchased coiled strip, flat bar, or extruded bar.

It also offers conversion services on materials supplied by its customers.The company's products are used in aerospace, power generation, oil and gas, heavy equipment, general, and industrial markets.It sells its products to service centers, forgers, rerollers, and OEMs. Universal Stainless & Alloy Products, Inc.

was incorporated in 1994 and is headquartered in Bridgeville, Pennsylvania.

Show Full description

1.b. Last Insights on USAP

Here is a 90-word analysis of the positive drivers behind Universal Stainless & Alloy Products, Inc.'s recent stock performance: The acquisition by Aperam S.A. has been a significant positive driver, with Universal Stainless stockholders receiving $45.00 per share in cash. The deal's completion has provided certainty and a significant premium to shareholders. Additionally, the company's resilience in the face of industry headwinds, as highlighted in the article "4 Steel Stocks That Have Gained More Than 30% in 2024 Amid Price Slump", suggests underlying strength in its business operations.

1.c. Company Highlights

Last Price	44.99
Change Percentage	0.00%
Open	45
Previous Close	44.99
Market Cap ( Millions)	424
Volume	666111
Year High	45.3
Year Low	18.38
M A 50	44.24
M A 200	37.61

FCF Yield	2.40%
Dividend Yield	0.00%
ROE	8.07%
Debt / Equity	27.35%
Net Debt / EBIDTA	179.74%
Price To Book	1.65
Price Earnings Ratio	20.94
Price To FCF	41.58
Price To sales	2.49
EV / EBITDA	12.79

2. Transcript Summary

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3. NewsRoom

Universal Stainless Announces Completion of its Acquisition by Aperam

Jan -23

Source: globenewswire.com

Universal Stainless Stockholders Approve Acquisition by Aperam

Jan -15

Source: globenewswire.com

SHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates USAP and PDCO on Behalf of Shareholders

Jan -06

Source: globenewswire.com

SHAREHOLDER INVESTIGATION: Halper Sadeh LLC Investigates NAPA and USAP on Behalf of Shareholders

Dec -12

Source: globenewswire.com

4 Steel Stocks That Have Gained More Than 30% in 2024 Amid Price Slump

Dec -11

Source: zacks.com

USAP Alert: Monsey Firm of Wohl & Fruchter Investigating Fairness of the Sale of Universal Stainless & Alloy Products to Aperam

Oct -31

Source: globenewswire.com

Universal Stainless Reports Record Sales and Net Income in Third Quarter of 2024

Oct -30

Source: globenewswire.com

SHAREHOLDER INVESTIGATION: The M&A Class Action Firm Investigates the Merger of Universal Stainless & Alloy Products Inc. - USAP

Oct -25

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.67%)

6. Segments

Specialty Alloys

Expected Growth: 8.5%

Strong demand from aerospace and power generation industries, driven by increasing aircraft production and renewable energy adoption, coupled with Universal Stainless' strategic investments in premium alloy production and expanded capacity, contribute to the 8.5% growth in Specialty Alloys segment.

Premium Alloys

Expected Growth: 9.2%

Premium Alloys from Universal Stainless & Alloy Products, Inc. growth of 9.2% driven by increasing demand from aerospace and energy industries, coupled with rising adoption of high-performance alloys in industrial applications, and strategic expansion into emerging markets.

Conversion Services and Other Sales

Expected Growth: 8.8%

The 8.8% growth in Conversion Services and Other Sales from Universal Stainless & Alloy Products, Inc. is driven by increasing demand for high-value, specialty steel products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, quality, and customer service has led to higher sales volumes and pricing power.

7. Detailed Products

Specialty Stainless Steels

High-performance stainless steels for demanding applications

High-Temperature Stainless Steels

Heat-resistant stainless steels for high-temperature applications

Duplex Stainless Steels

High-strength, corrosion-resistant stainless steels for harsh environments

Nickel Alloy Steels

High-temperature, corrosion-resistant alloys for extreme environments

Custom Alloys

Tailored alloys for specific customer applications

Forgings

Custom forgings for high-performance applications

Machined Components

Precision-machined components for demanding applications

8. Universal Stainless & Alloy Products, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Universal Stainless & Alloy Products, Inc. is medium due to the availability of alternative materials and products in the market.

Bargaining Power Of Customers

The bargaining power of customers for Universal Stainless & Alloy Products, Inc. is high due to the concentration of buyers in the industry and their ability to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Universal Stainless & Alloy Products, Inc. is low due to the availability of multiple suppliers in the market and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for Universal Stainless & Alloy Products, Inc. is medium due to the moderate barriers to entry in the industry and the availability of resources.

Intensity Of Rivalry

The intensity of rivalry for Universal Stainless & Alloy Products, Inc. is high due to the high competition in the industry and the need to differentiate products and services.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	26.28%
Debt Cost	9.00%
Equity Weight	73.72%
Equity Cost	9.00%
WACC	9.00%
Leverage	35.65%

11. Quality Control: Universal Stainless & Alloy Products, Inc. passed 4 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

Friedman Industries

A-Score: 5.4/10

Value: 7.0

Growth: 6.3

Quality: 5.1

Yield: 2.0

Momentum: 8.5

Volatility: 3.7

1-Year Total Return ->

Ascent Industries

A-Score: 4.8/10

Value: 6.5

Growth: 1.0

Quality: 4.5

Yield: 0.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

Universal Stainless & Alloy Products

A-Score: 4.5/10

Value: 4.9

Growth: 4.8

Quality: 5.5

Yield: 0.0

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

Olympic Steel

A-Score: 4.5/10

Value: 7.6

Growth: 5.0

Quality: 4.7

Yield: 3.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

Metallus

A-Score: 4.4/10

Value: 7.2

Growth: 2.3

Quality: 5.2

Yield: 0.0

Momentum: 6.5

Volatility: 5.0

1-Year Total Return ->

Clearwater Paper

A-Score: 4.1/10

Value: 9.3

Growth: 4.7

Quality: 5.9

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

11.22%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.00%

Universal Stainless & Alloy Products, Inc. - US9138371003

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on USAP

1.c. Company Highlights

Strong Momentum

Average Yield

Medium Volatility

Earnings Beats

Revenues Miss

Lower Growth

Revenues Beats

Average Quality

Stable Momentum

Fairly Valued

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.67%)

6. Segments

Specialty Alloys

Expected Growth: 8.5%

Premium Alloys

Expected Growth: 9.2%

Conversion Services and Other Sales

Expected Growth: 8.8%

7. Detailed Products

Specialty Stainless Steels

High-Temperature Stainless Steels

Duplex Stainless Steels

Nickel Alloy Steels

Custom Alloys

Forgings

Machined Components

8. Universal Stainless & Alloy Products, 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: Universal Stainless & Alloy Products, Inc. passed 4 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

44.99$

Current Price

44.99$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA