Friedman Industries Inc. Common Stock (FRD)

FairStock Score: 83/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for understandable businesses, and Friedman is simple: it processes steel into sheets, plates, and tubular goods. That simplicity is appealing, but steel is a commodity business. There is little durable competitive moat when customers can shop among processors. The Lynch category confirms this: CYCLICAL — Steel, earnings follow the economic cycle. Recent results have been strong: in the quarter ended 2026-06-30, revenue was $240.0M, net income $12.8M, and diluted EPS $1.79, up from $134.8M, $5.0M, and $0.71 in the quarter ended 2025-06-30. That is a sharp cyclical rebound. Financial health is mixed. The FairStock figures show ROE 18.11% and ROCE 8.64%, a Piotroski F-Score 6/9, D/E 0.62, Altman Z-Score 2.82, and a FairStock Score of 83/100. But trailing free cash flow was -$7.2M, a -2.3% FCF yield. Cyclical profits can vanish when steel spreads tighten, and negative cash generation is a warning. Valuation at the 2026-10-13 close of $42.91: P/E 11.17, P/B 1.89, EV/EBITDA 8.90, PEG 0.07. The Graham Number is $44.34, leaving only 3.23% margin of safety. So the stock is not statistically expensive, but it is near Graham's asset-based ceiling. The 52-week range of $16.55-$48.77 shows how volatile sentiment has been. I see a fair-to-slightly-cheap cyclical, not a bargain with a wide moat. The balance sheet and recent earnings are acceptable, but the lack of free cash flow and commodity economics keep me cautious.

In plain English: Friedman Industries makes and processes steel products, mainly flat-rolled steel and tubular pipe, for U.S. customers. Its results rise and fall with the steel economy, but the latest filed quarter showed much higher sales and profit than a year earlier, and the balance sheet looks reasonably solid. At the 2026-10-13 close, the price looks roughly fair against its earnings and accounting value rather than a deep bargain, and the company used more cash than it generated over the past year.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q1 2027 10-Q (period ended 2026-06-30) · fiscal Q3 2026 10-Q (period ended 2025-12-31) · fiscal Q2 2026 10-Q (period ended 2025-09-30) · fiscal Q1 2026 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-03-31) · FY2024 10-K (period ended 2024-03-31) · FY2023 10-K (period ended 2023-03-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer