📊 CMC Key Takeaways
Is COMMERCIAL METALS Co (CMC) a Good Investment?
CMC maintains a financially sound balance sheet with strong liquidity (2.33x current ratio) and excellent interest coverage (32.3x), generating $198.8M in free cash flow. However, net income collapsed 82.6% YoY with razor-thin 3.9% gross margins, indicating severe cyclical headwinds in commodity steel pricing that have compressed profitability despite stable revenue.
Commercial Metals has strong liquidity, excellent interest coverage, and positive free cash flow, but its earnings quality and momentum are concerning given the sharp decline in net income and diluted EPS alongside modest revenue contraction. Fundamentals support financial resilience, yet weak margins, heavy capital requirements, higher leverage, and an apparent inconsistency between reported gross profit and operating income warrant caution.
COMMERCIAL METALS Co Key Strengths (CMC)
- Strong balance sheet: $4.5B equity, Debt/Equity of 0.71x provides financial flexibility
- Excellent liquidity: 2.33x current ratio and 1.54x quick ratio enable operational resilience
- Robust cash generation: $603M operating cash flow and $198.8M free cash flow despite profitability decline
- Outstanding debt serviceability: 32.3x interest coverage ratio indicates negligible default risk
- Insider activity: 9 Form 4 filings in last 90 days suggest management confidence
- Strong liquidity with a 2.33x current ratio and 1.54x quick ratio
- Very strong 32.3x interest coverage despite $3.20B of long-term debt
- Positive $603.02M operating cash flow and $198.75M free cash flow
CMC Stock Risks: COMMERCIAL METALS Co Investment Risks
- Severe profitability deterioration: 82.6% YoY decline in net income signals significant cyclical stress
- Commodity margin compression: 3.9% gross margin reflects brutal pricing pressure in steel industry
- Revenue contraction: -1.6% YoY decline indicates weakening demand environment
- Thin free cash flow margin: 3.0% FCF margin leaves limited buffer for continued headwinds
- Cyclical vulnerability: Steel sector exposure to macroeconomic slowdown and commodity price volatility
- Net income declined 82.6% and diluted EPS declined 82.1% year over year
- Thin 3.9% gross margin and 3.0% free-cash-flow margin provide limited downside protection
- Reported gross profit is below operating income, suggesting classification issues or potentially unreliable period comparability
Key Metrics to Watch
- Gross margin trend - critical indicator of commodity pricing environment recovery
- Free cash flow sustainability - must remain positive if profitability cycle extends
- Revenue growth acceleration - reversal of -1.6% YoY decline signals demand improvement
- Debt/Equity ratio - monitor for covenant compliance if cycle persists
- Operating cash flow conversion - watch for deterioration below current $603M levels
- Operating and net income growth
- Free cash flow after capital expenditures
COMMERCIAL METALS Co (CMC) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 3.0% FCF margin may limit capital allocation flexibility. Strong liquidity with a 2.33x current ratio provides a solid financial cushion.
CMC Profit Margin, ROE & Profitability Analysis
CMC vs Materials Sector: How COMMERCIAL METALS Co Compares
How COMMERCIAL METALS Co compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is COMMERCIAL METALS Co Stock Overvalued? CMC Valuation Analysis 2026
Based on fundamental analysis, COMMERCIAL METALS Co has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
COMMERCIAL METALS Co Balance Sheet: CMC Debt, Cash & Liquidity
CMC Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: COMMERCIAL METALS Co's revenue has grown significantly by 31% over the 5-year period, indicating strong business expansion. The most recent EPS of $7.25 reflects profitable operations.
CMC Revenue Growth, EPS Growth & YoY Performance
CMC Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $2.0B | -$67.1M | $-0.59 |
| Q2 2026 | $1.8B | $25.5M | $0.22 |
| Q1 2026 | $1.9B | -$175.7M | $-1.54 |
| Q3 2025 | $2.0B | -$67.1M | $-0.59 |
| Q2 2025 | $1.8B | $25.5M | $0.22 |
| Q1 2025 | $1.9B | -$175.7M | $1.49 |
| Q3 2024 | $2.1B | $119.4M | $1.02 |
| Q2 2024 | $1.8B | $85.8M | $0.73 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
COMMERCIAL METALS Co Dividends, Buybacks & Capital Allocation
CMC SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for COMMERCIAL METALS Co (CIK: 0000022444)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CMC
What is the AI rating for CMC?
COMMERCIAL METALS Co (CMC) has a Combined AI Grade of B from Claude (B) and ChatGPT (B) with 72% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CMC's key strengths?
Claude: Strong balance sheet: $4.5B equity, Debt/Equity of 0.71x provides financial flexibility. Excellent liquidity: 2.33x current ratio and 1.54x quick ratio enable operational resilience. ChatGPT: Strong liquidity with a 2.33x current ratio and 1.54x quick ratio. Very strong 32.3x interest coverage despite $3.20B of long-term debt.
What are the risks of investing in CMC?
Claude: Severe profitability deterioration: 82.6% YoY decline in net income signals significant cyclical stress. Commodity margin compression: 3.9% gross margin reflects brutal pricing pressure in steel industry. ChatGPT: Net income declined 82.6% and diluted EPS declined 82.1% year over year. Thin 3.9% gross margin and 3.0% free-cash-flow margin provide limited downside protection.
What is CMC's revenue and growth?
COMMERCIAL METALS Co reported revenue of $6.7B.
Does CMC pay dividends?
COMMERCIAL METALS Co pays dividends, with $62.1M distributed to shareholders in the trailing twelve months.
Where can I find CMC SEC filings?
Official SEC filings for COMMERCIAL METALS Co (CIK: 0000022444) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CMC's EPS?
COMMERCIAL METALS Co has a diluted EPS of $3.96.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is CMC's fundamental grade?
Based on our AI fundamental analysis in August 2026, COMMERCIAL METALS Co has a B grade with 72% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is CMC stock overvalued or undervalued?
Valuation metrics for CMC: ROE of 9.8% (sector avg: 14%), net margin of 6.6% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is CMC's AI grade for 2026?
Our dual AI analysis gives COMMERCIAL METALS Co a combined B grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CMC's free cash flow?
COMMERCIAL METALS Co's operating cash flow is $603.0M, with capital expenditures of $404.3M. FCF margin is 3.0%.
How does CMC compare to other Materials stocks?
Vs Materials sector averages: Net margin 6.6% (avg: 10%), ROE 9.8% (avg: 14%), current ratio 2.33 (avg: 1.6).