Will Schnitzer Steel Stock Hold Strong on its Bullish Run in 2022?

SCHN will report earnings on Jan. 6

facebook twitter linkedin


Steel name Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) is set to announce its fiscal first-quarter earnings results before the open on Thursday, Jan. 6, 2022. The company will also host a webcast conference call to discuss the results on the same day. Wall Street's analysts anticipate that SCHN's earnings will come in at $1.76 per share for this upcoming earnings report.

A look back at Schnitzer Steel Industries' last eight earnings reports shows three post-earnings drops, four next-day rises, and one instance in which SCHN was unchanged back in January of 2020. The stock has averaged a 1% swing the day after its report, regardless of direction, which is lower than the 5.4% swing the options pits are pricing in this time around. 

Options traders have been bearish ahead of the report. This is per SCHN's 10-day put/call volume ratio of 1.62 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 82% of readings from the past year. This implies long puts are being picked up at a quicker-than-usual clip.

Schnitzer Steel stock saw a pullback in late-November, after losing steam just below its June 1, 10-year high of $59,34, at the $58 area. The pullback looks to have found support at the $46 region, though, which is also home to SCHN's March peak from this year, as well as its annual highs in 2012. Year-to-date, SCHN is up 62%.

Snag_1f7230a

From a fundamental perspective, Schnitzer Steel stock has an attractive price-earnings ratio of 9.14 and strong price-sales ratio of 0.52. SCHN also reported 61% annual growth in revenues and a $169 million increase in net income for fiscal 2021.

However, the rest of the steel company’s fundamentals are relatively weak. For example, Schnitzer Steel's balance sheet has only $27.82 million in cash and $209.54 million in total debt. In addition, SCHN has struggled to maintain consistent top and bottom line growth in recent years. The steel company experienced a 28% decline in revenues and an over $160 million decrease in net income between fiscal 2018 and fiscal 2020. Furthermore, Schnitzer Steel stock has a forward price-earnings ratio of 54.35, suggesting that SCHN will experience a significant decrease in earnings and indicating a much less attractive valuation.

 

If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

 


 


 
Special Offers from Schaeffer's Trading Partners