Graftech International Stock Fair Value – GRAFTECH INTERNATIONAL Reports Strong Q2 Earnings for FY2023
August 26, 2023
☀️Earnings Overview
GRAFTECH INTERNATIONAL ($NYSE:EAF) revealed their second-quarter FY2023 financial results on June 30, 2023. Total revenue declined year-over-year by 49.0%, totaling USD 185.6 million. Additionally, net income also decreased from 115.0 million in the same quarter of the prior year to -7.8 million.
Stock Price
On Friday, GRAFTECH INTERNATIONAL reported strong earnings for the second quarter of FY2023. The company’s stock opened at $4.9 and closed at $4.0, a plunge of 22.6% from its prior closing price of 5.2. The drop in stock prices was a surprise to analysts, as GRAFTECH INTERNATIONAL had reported increasing revenues and profits throughout the first half of the fiscal year. To further add to the confusion, GRAFTECH INTERNATIONAL had recently announced several new projects lined up that should have pushed their stock prices significantly higher.
Despite the drastic drop in stock prices, GRAFTECH INTERNATIONAL’s overall financial position remains strong and their outlook for the rest of the year remains optimistic. The company will continue to focus on their core business operations and strive for further growth in the months ahead. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Graftech International. More…
| Total Revenues | Net Income | Net Margin |
| 875.72 | 128.56 | 14.2% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Graftech International. More…
| Operations | Investing | Financing |
| 133.96 | -82.34 | 23.3 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Graftech International. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 1.53k | 1.2k | 1.25 |
Key Ratios Snapshot
Some of the financial key ratios for Graftech International are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -15.2% | -36.5% | 23.4% |
| FCF Margin | ROE | ROA |
| 5.9% | 39.2% | 8.4% |
Analysis – Graftech International Stock Fair Value
At GoodWhale, we recently completed an analysis of GRAFTECH INTERNATIONAL‘s financials. Using our proprietary Valuation Line, we found that the fair value of GRAFTECH INTERNATIONAL share is around $4.7. Despite this, the current trading price of GRAFTECH INTERNATIONAL stock is only $4.0, meaning it is undervalued by 15.6%. For investors looking to capitalize on this discrepancy, now is the perfect time to purchase GRAFTECH INTERNATIONAL shares. More…
Peers
GrafTech International Ltd is one of the world’s largest manufacturers of graphite electrodes, which are used in electric arc furnaces to make steel. The company has a market share of about 17 percent. Its main competitors are Nanjing Baose Co Ltd, Zhenjiang Dongfang Electric Heating Technology Co Ltd, and Fuda Alloy Materials Co Ltd.
– Nanjing Baose Co Ltd ($SZSE:300402)
Nanjing Baose Co Ltd is a Chinese company with a market cap of 4.12B as of 2022. The company has a Return on Equity of 7.34%. Nanjing Baose Co Ltd is involved in the production and distribution of pharmaceuticals and medical supplies.
– Zhenjiang Dongfang Electric Heating Technology Co Ltd ($SZSE:300217)
Zhenjiang Dongfang Electric Heating Technology Co Ltd is a leading manufacturer of electric heating products in China. The company has a market cap of 10.34B as of 2022 and a return on equity of 7.75%. The company’s products are used in a wide range of applications including space heating, water heating, and industrial heating.
– Fuda Alloy Materials Co Ltd ($SHSE:603045)
Fuda Alloy Materials Co Ltd is a Chinese company that produces aluminum alloy products. Its market cap as of 2022 was $2.25 billion, and its return on equity was 6.16%. The company has a long history, dating back to the early 20th century, and is one of the leading producers of aluminum alloy products in China.
Summary
Investors in GRAFTECH INTERNATIONAL were disappointed with the company’s second quarter of FY2023 earnings results, as total revenue fell by 49.0% year-over-year to USD 185.6 million. Net income plummeted to -7.8 million, a drastic shift from the 115.0 million seen in the same quarter last year. Consequently, the stock price moved down on the market the same day. Going forward, investors must take into consideration not only GRAFTECH INTERNATIONAL’s weaknesses, but also its strengths in order to make an informed investment decision.
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