Ryerson Holding Corp (RYZ): what the price assumes
In the published model solve dated 2026-Q2, anchored at $27.61, Ryerson Holding Corp (RYZ) is priced for +5.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-28.
Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/RYZ
Headline
| Field | Value |
|---|---|
| Ticker | RYZ |
| Company | Ryerson Holding Corp |
| Current price | $27.61/sh |
| Composition | United States 90% / Other (foreign) 10% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 1.8% |
| Operating margin (mid-cycle) | 3.7% |
| Margin compression (value-band) | -1.9pp |
| Trailing margin (depressed year) | 0.3% |
| Implied growth | 5.4% |
| Multiple paid | 13x mid-cycle operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 9.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.5pp.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.20σ |
| implied end-window share | 0% |
Valuation X-Ray
The price is supported by earnings-power and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.25x | 3 | expensive |
| Earnings | 1.12x | 1 | expensive |
| Relative | 0.10x | 3 | justifies |
| Growth | 0.97x | 3 | justifies |
Families that justify the price: Earnings, Relative, Growth
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.
Per-Model Detail (n=10)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $0.00 | — | no | Negative/zero FCF — equity value floored at $0 |
| DCF Exit Multiple | Growth | $0.00 | — | no | Negative/zero FCF or EBITDA — equity value floored at $0 |
| Relative Valuation | Relative | $277.50 | 0.10x | yes | P/S fallback (negative EPS): Sector P/S 2.5x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | $6.10 | 4.53x | yes | DPS $0.74, g=-2.5% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $0.03 | 920.33x | yes | Stage 1: -96% for 5yr, Stage 2: 3.5% perpetual (excluded from median) |
| Simple Excess Return | Asset | $24.49 | 1.13x | yes | Book value floor: BV/sh $24.49, ROE negative |
| Two-Stage Excess Return | Asset | $22.04 | 1.25x | yes | Book value with convergence: BV/sh $24.49, ROE converges to ke |
| Discounted Future Market Cap | Growth | $28.42 | 0.97x | yes | Rev $5.8B, growth 30% (input: historical growth; tapered), Terminal P/S: 0.2x / 0.2x / 0.3x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | $391.00 | 0.07x | yes | Margin ramp: -1% → 12% over 7yr, rev growth 30% (input: historical growth; tapered) |
| Earnings Power Value | Earnings | $24.67 | 1.12x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.24B × (1−27%) / WACC 8.1% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $3.25 | 8.50x | yes | EBITDA $0.04B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | — | — | no | — |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | $4.66 | 5.92x | yes | BV $24.49 × (ROIC 1.5% / WACC 8.1%) |
| P/Sales Sector | Relative | $277.50 | 0.10x | yes | Revenue $5.84B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Metals Service Centers (consolidated) | operating | enterprise | 4.6B reported-currency | — | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $913.3m |
| Net debt / NOPAT (after-tax) | 5.79x |
| Net debt / operating income (pre-tax) | 4.21x |
| Share count CAGR (dilution) | 8.1% |
| Burning cash | yes |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 3.7%); the trailing year was depressed.
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- At about $27.72 the market pays roughly 14x mid-cycle operating income, which inverts to about 11% annual operating-profit growth for five years. The trailing line is depressed by the cycle, so the price leans on normalized earnings rather than the trough quarter.
- The asset and earnings-power families bracket the price closely: book value per share is $29.71, the earnings-power mark is $36, and excess-return reference floors sit near $27 to $30. This reads as an asset-supported value name, not a growth bet.
- The constraint is the balance sheet and the cycle together: net debt near $883 million against a metals distribution business whose margins swing with steel and aluminum prices, now reshaped by the Olympic Steel combination that adds scale but also integration risk.
Bull Case
Capital allocation is the clearest read on where management sees value, and Ryerson has been spending it on consolidation. The defining move is the Olympic Steel combination, which contributed $272.7 million of net sales and $4.1 million of net income in its first partial quarter inside Ryerson and carries a target of roughly $120 million in annual synergies by early 2028 (web research). For a metals service center, scale is the moat: the FY2025 10-K describes the business as "closing the gap between metal producers' supply and end-users' demand" by "aggregating end-users' demand and purchasing metal in bulk to take advantage of economies of scale" (accession 0001193125-26-062397). A larger combined purchasing footprint buys metal cheaper and spreads fixed processing and logistics cost over more tons, which is exactly the lever a low-margin distributor needs. Management is also paying a $0.90 dividend and runs a modest 2.4% share count growth, so the cash deployment is consolidation plus a steady payout rather than dilutive empire-building.
The valuation supports that capital story rather than fighting it. The price sits almost on top of book value per share at $29.71, the two excess-return reference floors land at roughly $27 and $30, and the earnings-power value, normalizing five years of operating income, marks $36 against a $27.72 (June 28, 2026) quote (accession 0001193125-26-062397). Three of the four families say the price is at or below fair on an asset and earnings-power basis; only the growth-DCF family reads expensive, which is appropriate for a cyclical that is not supposed to be a compounding growth story. The blended X-ray lands near $28, essentially at the quote, so the buyer is paying close to the replacement-and-earnings value of the assets.
The cycle is turning in the company's favor at the same time the scale is arriving. First-quarter 2026 net sales reached $1.57 billion, up 37.9% year over year, with tons shipped up 31.2% and average selling prices up 5.2%, and on a same-store basis tons rose 4.6% and prices 8.9% (web research). Earnings of $0.30 per share beat the estimate, and management guided to further revenue and earnings growth in the second quarter on full-period Olympic contributions and continued margin expansion. The price assumes about 11% mid-cycle operating-profit growth for five years, a pace inside the company's own history, so the embedded assumption is within range rather than heroic, and the synergy program is the mechanism that can deliver it.
Bear Case
A metals distributor sits at the mercy of a cycle it cannot control, and that is the first crack in the bull read. The FY2025 10-K states the obvious risk in plain terms: the company operates "in an industry that is subject to cyclical fluctuations," and metal purchases are "generally at prevailing market prices in effect at the time we place our orders" (accession 0001193125-26-062397). Margin is the spread between the price of metal bought and the price of metal sold, and in a falling-price environment a service center can be caught long inventory it acquired at a higher cost. The current strength in shipments and selling prices is the upswing of that cycle, not a permanent margin level, and the price already capitalizes mid-cycle earnings rather than the trough, so there is limited cushion if steel and aluminum prices roll over. Only about half of comparable companies sustained the assumed pace for even five years.
The earnings the price leans on are normalized, and the gap between normalized and reported is wide. Trailing operating income was roughly negative $10 million, while the mid-cycle normalization the inversion uses sits near $186 million, a divergence the data flags explicitly. That is the cyclicality made numeric: the business swung from a normalized $186 million to a trough near breakeven within the measured window. A buyer paying 14x mid-cycle income is betting the company climbs back to mid-cycle and holds there, but the same volatility that produced the trough can return, and at the trough the asset-value floor is the only thing left supporting the price.
Leverage compounds the cyclicality. Net debt is about $883 million against a business whose operating income just touched breakeven, and the 10-K is explicit that indebtedness "under the Ryerson Credit Facility, which could adversely affect our financial position," stood at $463.2 million at year-end 2025 before the combination layered on more (accession 0001193125-26-062397). Interest coverage cannot even be computed cleanly because interest expense is not separately reported. The Olympic Steel integration adds both the debt to fund it and the execution risk of merging two distribution networks, and the $120 million synergy target is a 2028 promise, not a 2026 fact. If the cycle weakens before the synergies land, a leveraged distributor with thin liquidity has less room to maneuver than its asset-supported valuation suggests.
Valuation
The price is read on a whole-company basis against operating income, because the trailing line is depressed by the cycle and a trough quarter would mislead. Using the company's own through-the-cycle margins on current revenue, the quote works out to roughly 14x mid-cycle operating income, which inverts to about 11% annual operating-profit growth over a five-year stage at a 10% cost of capital. That near-term pace is within Ryerson's own history, so the assumption is within range. The stretch, as the inversion notes, is in how long the recovery must persist rather than the rate.
The X-ray is the picture of a cyclical at a low point. Models that need positive trailing earnings, DCF, FCF yield, Graham number, residual income, are all gated off by the negative trailing operating result, which is why the per-share point estimates from the relative and EV/EBITDA methods are unreliable here (they divide by a near-zero trough EBITDA and blow up). The meaningful marks are the asset family and earnings-power: book value per share $29.71, excess-return reference floors near $27 and $30, and an earnings-power value of $36 that normalizes five years of operating income (accession 0001193125-26-062397). The blended mark is about $28, at the current price.
The honest read is that this is an asset-and-earnings-power value name where the buyer pays close to book and mid-cycle earnings power, and the variable that decides the outcome is the cycle: whether selling prices and shipments hold long enough for the normalized earnings, and the Olympic synergies, to actually arrive.
Catalysts
The dominant catalyst is the Olympic Steel integration. In the first quarter of 2026 Olympic contributed $272.7 million of net sales and $4.1 million of net income, and Ryerson is targeting roughly $120 million in annual synergies by early 2028 (web research). The pace of those synergies, and whether the combined network delivers the promised purchasing and processing scale, is the swing factor for earnings over the next two years.
The near-term operating trend is favorable. First-quarter 2026 net sales reached $1.57 billion, up 37.9% year over year, with tons shipped up 31.2% and average selling prices up 5.2%, and same-store volume and pricing both rose (web research). Earnings of $0.30 per share beat the $0.28 estimate, though revenue of $1.57 billion came in below the consensus near $1.72 billion. Management guided to further revenue and earnings growth in the second quarter on full-period Olympic contributions and continued margin expansion.
The variables to watch are the metal-price cycle and the balance sheet against it. Selling prices and shipment volumes set the gross margin spread, so a reversal in steel or aluminum pricing would pressure both the top line and the inventory carried against it. Net debt near $883 million and the funding of the combination are the second watch item: the synergy realization needs to outrun the integration cost and any cyclical softening. Watch quarterly average selling prices, same-store tons, the cadence of synergy capture, and net debt as the merged entity settles.
Sources: Ryerson Q1 2026 earnings transcript (fool.com, theglobeandmail.com); Ryerson Q1 2026 earnings coverage (quiverquant.com, stocktitan.net); Ryerson Q1 2026 results presentation (seekingalpha.com).
Peer Cohorts (Per Segment, With Filing Citations)
Metals Service Centers (consolidated) (reported)
- RS (RELIANCE, INC.)
- FY2025 10-K: …of a reduced number of shipping days, resulting from holidays observed by the Company as well as vacation and extended holiday closures at some of our customers. The number of shipping days in each quarter has an impact on our quarterly sales and profitability. We cannot predict whether period-to-period fluctuations…
- FY2025 10-K: …unfavorable metals demand and/or raw material pricing. ● Industry Leader According to the MSCI reporting of industry tons sold in the U.S., our 2025 tons sold from our U.S. locations represented approximately 17% of the total tons sold by the U.S. metals service center industry compared to approximately 15% for…
- MSM (MSC INDUSTRIAL DIRECT CO., INC.)
- FY2025 10-K: …more efficient. Certain of our customer fulfillment centers also utilize robotic packing solutions and order-picking systems that improve productivity and associate safety while reducing energy consumption and saving space. Some specialty or custom items and very large orders are shipped directly from the…
- FY2025 10-K: …C Consumables and OEM product lines. Selectively pursuing strategic acquisitions and investments. MSC is a leader in the highly fragmented industrial distribution market with significant opportunities for organic and acquisitive growth. We selectively pursue strategic acquisitions that deepen our metalworking…
- AIT (APPLIED INDUSTRIAL TECHNOLOGIES, INC.)
- FY2025 10-K: …and greater U.S. manufacturing activity. We believe these considerations are accelerating consolidation across our sector both organically and through acquisitions as customers increase business with larger, more capable distributors while smaller providers face rising operational requirements. We are favorably…
- FY2025 10-K: …no change in the composition of either reportable segment. In fiscal 2025, our Service Center segment represented 66% of our total sales, while our Engineered Solutions segment represented 34% of our total sales. Service Center . Our Service Center segment includes our MRO-focused distribution operations across North…
- WCC (WESCO International, Inc.)
- FY2025 10-K: …agreements with more than 450 preferred suppliers and approximately 68% of our purchases are made pursuant to these arrangements. We offer a wide range of sustainable products from the world's leading manufacturers and help our customers determine solutions to meet their sustainability goals. Key categories include…
- FY2025 10-K: …connectivity, power systems, wireless technologies, connected devices (IoT), and related products to enable seamless connectivity and communications in commercial buildings, hyperscale data centers, multi-tenant data centers, and cloud-based platforms. In the security business, CSS offers on-premise, cloud or hybrid…
- DXPE (DXP Enterprises, Inc.)
- FY2025 10-K: …purchasing large quantities of product are able to outsource all or most of those needs to us. For customers with smaller supply needs, we are able to combine our traditional distribution capabilities with our broad product categories and advanced ordering systems to allow the customer to engage in one-stop sourcing…
- FY2025 10-K: …to lower total purchasing costs, improve inventory management, ensure consistently high levels of customer service and enhance purchasing power. This focus on fewer suppliers has led to consolidation within the fragmented industrial distribution industry. • Customized Integrated Service. As industrial customers focus…
- GPC (GENUINE PARTS CO)
- FY2025 10-K: …supplies Our customers span numerous industries such as aggregate and cement, automotive, chemical and allied products, equipment and machinery, equipment rental and leasing, fabricated metals, food and beverage, iron and steel, mining, lumber and wood, oil and gas, pulp and paper, and rubber products. We have…
- FY2025 10-K: …Automotive", would include our North America Automotive and International Automotive segments, and "Global Industrial" would include our Industrial Segment. The transaction is intended to qualify as a tax-free transaction for U.S. federal income tax purposes for the Company's shareholders. The separation is targeted…
- SITE (SiteOne Landscape Supply, Inc.)
- FY2025 10-K: …borrowers and the several banks and other financial institutions from time to time party thereto, and ING Capital LLC, as administrative agent, is incorporated by reference to Exhibit 10.16 to the Form S-1. 98 Table of Contents Exhibit Number Description 10.10 Amendment No. 3 to the Term Loan Credit Agreement, dated…
- FY2025 10-K: …in approved qualified renewable energy projects. The Company's investments include a tax equity interest structured as an inverted lease and as a partnership flip. The carrying value of the investments is included in Other assets in the Consolidated Balance Sheets, with any unfunded commitments included in Accrued…
- WSO (WATSCO INC)
- FY2025 10-K: :RestrictedStockMember wso:CommonAndClassBCommonStockMember 2024-01-01 2024-12-31 0000105016 us-gaap:FairValueInputsLevel3Member us-gaap:OtherAssetsMember 2025-12-31 0000105016 wso:FederalFundsEffectiveRateMember us-gaap:RevolvingCreditFacilityMember wso:BaseRateBorrowingMember srt:MaximumMember 2025-01-01 2025-12-31…
- FY2025 10-K: …us-gaap:RevolvingCreditFacilityMember srt:MinimumMember wso:BaseRateBorrowingMember 2025-01-01 2025-12-31 0000105016 wso:RussellSiglerIncMember 2025-12-31 0000105016 wso:FederalFundsEffectiveRateMember us-gaap:RevolvingCreditFacilityMember wso:BaseRateBorrowingMember 2025-12-31 0000105016…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.