CMC

Commercial Metals is a vertically integrated maker of rebar and steel long products serving construction markets, and FY2025 (year ended August 2025) was clearly a cyclical trough. Revenue dipped 1.6% to $7.80B, but net income collapsed 82.6% to just $84.7M as steel spreads and pricing compressed — driving a 1.1% net margin and a 2.0% ROE. The headline 97.8 P/E is therefore not a meaningful valuation signal; it reflects depressed trough earnings, not an expensive business. The multi-year history frames the cyclicality starkly: net income ran $413M, $1.22B, $860M, $485M and now $84.7M.

Crucially, the balance sheet and cash generation remain healthy through the downturn. Operating cash flow was still $715M, cash rose 21.7% to $1.05B, and equity of $4.19B sits against $2.98B of liabilities for a conservative 0.71x leverage ratio. Management kept returning capital — $199M of buybacks (shares down 2.6%) and $81.4M of dividends — and invested through the cycle, with capex up 24.2% to $403M (consistent with new micro-mill capacity coming online). That is the behavior of a company managing a cyclical low from a position of financial strength, not distress.