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Is this Large Market Cap Stock target price reasonable for Gerdau S.A. (NYSE:GGB)?

The company in question is, Gerdau S.A. (NYSE:GGB) currently with a stock price of 2.94 (1.38% today). The market cap for Gerdau S.A. is 4376.65, and is in the sector Basic Materials, and Steel & Iron industry. The target price for Gerdau S.A. is 6.53. Currently Gerdau S.A. is trading with a P/E of *TBA, and a forward P/E of 22.66. Average volume for Gerdau S.A. is 10285.71 and so far today it is 3593793.

Performance in the last year for Gerdau S.A. has been 77.58%. For EPS growth, Gerdau S.A. has seen a growth of -427.90%, and is looking to grow in the next year to 540.00%. More long term stats show that EPS growth has been -30.60% over the last five years and could be *TBA for the next five years. Gerdau S.A. has seen sales growth quarter over quarter at -4.70%, with EPS growth quarter over quarter at -71.70%. The 20-day simple moving average is 5.46%, with the 200-day simple moving average coming to 56.26%.

Since the IPO date for Gerdau S.A. on the 03/10/1999, Gerdau S.A. has seen performance year to date to be 142.49%. With Gerdau S.A. trading at 2.94, the dividend yield is 0.69%, and the EPS is -0.92.

So could Gerdau S.A., be undervalued? Well as said before P/E is *TBA. The PEG is *TBA, P/S is 0.33 and the P/B is at 0.58. The P/cash is 2.9, with P/free cash flow at 3.22.

Gerdau S.A. ability to deal with debt shows that the current ratio is 2.8, and the quick ratio is 1.7. This is with long term debt/equity at 0.71, and total debt/equity at 0.79.

In terms of margins, Gerdau S.A. has a gross margin of 9.10%, an operating margin of -8.50% and a profit margin of -11.80%.Payout ratio for Gerdau S.A. is *TBA. Return on assets come to -7.40% with return on investment coming to -2.90%.

Insider ownership for Gerdau S.A., is at 32.70% and institutional ownership comes to 19.30%. Outstanding shares are at 1509.19. While shares float is 857.09. The float short is currently 4.62%, and short ratio is 3.85.

Disclaimer: Remember there is a risk to your investment, this is not a recommendation, nor personal advice, never invest more than you are able too loose.

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Mark Hines

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