Gerdau S.A. (GGB) edged higher to $4.17, up 1.21%, as investors position ahead of the company’s upcoming earnings release scheduled for February 24, 2026. The Brazilian steel producer has delivered solid longer-term returns while trading at valuation levels that continue to draw attention from value-oriented investors.

Stock Performance and Market Context

Gerdau has posted a 12.10% year-to-date gain and a 40.10% return over the past year. Over five years, the stock has climbed 65.03%, modestly outperforming Brazil’s benchmark IBOVESPA index over that period. While short-term volatility remains tied to global steel pricing and construction demand cycles, longer-term performance reflects the company’s diversified geographic footprint and integrated operations.

The stock currently trades within its 52-week range of $2.27 to $4.66, indicating it is near the upper end of its recent trading band.

Earnings Pressure but Stabilizing Outlook

Recent earnings history shows a pattern of modest misses, with the company falling short of analyst expectations in several consecutive quarters. For Q3 FY2025, earnings per share came in at 0.54 versus an estimate of 0.58, marking a shortfall of 0.04.

However, forward-looking estimates suggest stabilization. Analysts project current-year earnings of approximately 1.8 (in BRL), with next-year estimates rising to 2.58, implying a potential rebound. Growth projections show next-year earnings growth of over 43%, following an expected contraction this year.

Revenue estimates remain relatively steady, with analysts forecasting current-year revenue near 69.57B BRL and modest growth into 2026.

Valuation Metrics Signal Relative Value

Gerdau’s valuation remains one of its key attractions. The company trades at a trailing P/E of 10.71 and a forward P/E of 6.20, suggesting the market is pricing in cyclical risk. Its price-to-sales ratio stands at 0.51, while price-to-book sits at 0.62, both reflecting discounted multiples compared to many global steel peers.

Enterprise value to EBITDA is approximately 4.88, reinforcing the view that the company trades at conservative levels relative to operating cash flow potential.

The dividend yield of approximately 2.68% adds an income component, offering additional support for investors seeking exposure to cyclical industrial names with payout stability.

Financial Position and Operational Strength

Gerdau reports trailing twelve-month revenue of approximately 69.71B BRL and net income near 3B BRL. Profit margins remain modest at 4.30%, consistent with the capital-intensive and cyclical nature of steel manufacturing.

The company maintains a manageable total debt-to-equity ratio of 36.52%, and total cash stands near 9.87B BRL, providing balance sheet flexibility amid fluctuating commodity cycles.

Founded in 1901 and headquartered in São Paulo, Brazil, Gerdau operates across Brazil, North America, South America, and specialty steel segments, supplying products to construction, automotive, agricultural, mining, energy, and infrastructure markets.

Investment Considerations

Gerdau sits at the intersection of global infrastructure demand, industrial production cycles, and commodity pricing trends. Investors evaluating the stock must balance attractive valuation metrics and dividend yield against earnings volatility and steel market cyclicality.

With earnings approaching, upcoming guidance on margins, pricing trends, and capital allocation will likely shape the stock’s next move.