3 models fit Gerdau S.A. Common Stock and they disagree: 1 of 3 land within 15% of the average.
Two or more of our models back this value.
Large discount(i)Gold82
Valued as a cyclical company: P/E comparison, EV/EBITDA comparison, Discounted cash flow, and Graham number.
ACCE opinionGerdau S.A. Common Stock (GGB)
Fair value (3 models)
$7.07
ACCE price target
$5.50
Rating
Undervalued
Horizon
12 months
Fair value published on 20 Oct 2026, 15:04 CEST; previously $6.92 since 16 Oct 2026, 00:00 CEST.
ACCE price target published on 10 Oct 2026, 00:00 CEST.
Rating published on 20 Oct 2026, 15:04 CEST.
Price used: $5.10 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, EV/EBITDA comparison, and Graham number.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
27.8% below
+38.6% to fair value
ACCE score
67
out of 100
Analysts
60% buy
5 covering
P/E
23.0x
forward 6.2x
1-year return
+50.9%
Dividend yield
3.56%
Gerdau S.A. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
Gerdau makes long steel products (rebar, wire rod, structural sections, and specialty bars) from electric arc furnaces that run largely on scrap, primarily in Brazil, North America and South America's Southern Cone. The scrap-based route gives it a cost position that is harder to replicate than blast-furnace competitors, and its North American footprint sits behind import barriers that have supported regional pricing. The trailing P/E of 23.0 reflects depressed earnings, while the forward P/E of 6.2 implies the market expects a sharp recovery in margins. Revenue growth is only 2.0% and ROE is 4.2%, so the thesis rests on a cyclical margin rebound rather than on growth, and the reader should check whether the forward estimate holds up against steel price and scrap spread trends before going further.
⚠ Investor warnings · 2 flagsAI-assisted·How I use AI
moderate
Thin net margin
Net margin is +3.2% against a 12.8% operating margin, so most operating profit is lost before it reaches shareholders. Earnings growth of +73.5% is off a low base and says little about durability.
moderate
Weak return on equity
ROE of +4.2% is low for the capital employed, and the P/E of 23.3 sits oddly against a forward P/E of 8.4, which implies a sharp expected earnings rebound that may not arrive.
AI research notes
AI-assisted·How I use AIWritten Oct 19, 2026 · figures from 2026-10-19 · prices to Oct 23, 2026
Why it could do well
Analysts' mean price target of $5.79 sits 12.9% above the current share price, with 60% (3 of 5) rating the stock Buy or Strong Buy.
The stock trades on 8.4x forward earnings against a sector median of 17.1x, and the dividend yield is 3.6%.
Free cash flow of BRL 1.1B over the last twelve months gives a 2.3% free cash flow yield, and the diluted share count fell 4.1% last year.
Why it could disappoint
Net margin of 3.2% and return on invested capital of 1.6% show the business keeps very little of each dollar of sales as profit.
Revenue grew just 2.0% year over year, well below the 9.8% yearly average of the past five years.
The current price already implies cash flow growth of only 2.3% a year, and the trailing P/E of 23.3x is high for this level of profitability.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Oct 26, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
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Where GGB's valuation models land
Price
$5.10
Model fair value
$7.07
Model range
$4.12 to $10.93
Fair value $7.07
Price $5.10
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
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