Steelcase Inc (SCS, Financial), a leading player in the Industrial Products industry, has seen a remarkable surge in its stock price over the past three months. The company's stock has gained 30.64% over the past week and a whopping 54.54% over the past three months. This impressive performance has caught the attention of investors and market analysts alike. Let's delve deeper into the factors contributing to this meteoric rise and the company's overall financial health.
Stock Performance and Valuation
Currently, Steelcase Inc's stock is trading at $10.98, with a market capitalization of $1.25 billion. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates. According to the GF Value, the stock is modestly undervalued with a GF Value of $13.26. This is a significant improvement from three months ago when the stock was considered a possible value trap, with a GF Value of $13.43.
Company Overview
Steelcase Inc is a US-based furniture company with operations extending to Europe, the Middle East, and Africa. The company markets its products primarily through a network of independent and company-owned dealers. Its operations are divided into the Americas segment, the EMEA segment, and the Other category. The Americas segment, which generates the majority of the company's revenue, offers architecture, furniture, and technology products to corporate, government, healthcare, education, and retail customers. The EMEA segment provides furniture systems, storage, and seating solutions.
Profitability Analysis
Steelcase Inc's Profitability Rank stands at 7/10, indicating a relatively high level of profitability. The company's Operating Margin is 3.25%, better than 31.83% of companies in the industry. Its ROE is 5.91%, ROA is 2.17%, and ROIC is 4.05%, all of which are better than a significant percentage of companies in the industry. Furthermore, the company has consistently been profitable over the past 10 years, which is better than 99.96% of companies in the industry.
Growth Prospects
Despite its impressive profitability, Steelcase Inc's Growth Rank is relatively low at 3/10. The company's 3-year and 5-year revenue growth rates per share are -3.30% and -1.30% respectively, which are better than a significant percentage of companies in the industry. However, the company's future revenue and EPS growth estimates are positive and better than a significant percentage of companies in the industry, with a total revenue growth rate (Future 3Y To 5Y Est) of 0.20% and an EPS without NRI Growth Rate (Future 3Y To 5Y Est) of 10.00%.
Major Stock Holders
The top three holders of Steelcase Inc's stock are Richard Pzena (Trades, Portfolio), Jeremy Grantham (Trades, Portfolio), and Jim Simons (Trades, Portfolio). Richard Pzena (Trades, Portfolio) holds the largest number of shares, with 9,925,860 shares, representing 8.71% of the company's stock. Jeremy Grantham (Trades, Portfolio) and Jim Simons (Trades, Portfolio) hold 123,087 and 94,100 shares respectively, representing 0.11% and 0.08% of the company's stock.
Competitive Landscape
Steelcase Inc faces competition from several companies within the same industry. Its main competitors include Ennis Inc (EBF, Financial) with a market capitalization of $547.052 million, HNI Corp (HNI, Financial) with a market capitalization of $1.58 billion, and ACCO Brands Corp (ACCO, Financial) with a market capitalization of $564.285 million.
Conclusion
In conclusion, Steelcase Inc's impressive stock performance, consistent profitability, and positive future growth estimates make it a compelling investment option. Despite facing stiff competition and having a relatively low growth rank, the company's stock is modestly undervalued, offering potential upside for value investors. However, as with any investment, it is crucial to conduct thorough research and consider various factors before making an investment decision.
