Friedman Industries, Incorporated (FRD) Stock

Friedman Industries, Incorporated (FRD) is a Materials stock trading at $45.03 (as of 2026-09-02), with a market capitalization of $324.83M and a trailing P/E of 14.1. Figures are sourced from first-party U.S. SEC EDGAR filings and market data.

Friedman Industries, Incorporated is engaged in processing steel coils and manufacturing and processing steel and pipe products, along with distributing those materials in the United States. It operates in two segments—Coil and Tubular—serving about 230 customers, primarily steel distributors and steel product manufacturers, with sales concentrated in the Midwest, Southwest, and Southeast.

Understand Friedman Industries, Incorporated: how it makes money

Friedman Industries converts steel coils into flat sheet, plate, and pipe for about 230 manufacturers, earning a processing spread and toll fees per ton. Almost all revenue is flat-steel resale; the Tubular pipe line is tiny, and the company has no real pricing power over its spread.

Profit is a thin, cyclical processing spread on high steel volumes: the company buys coils, adds cut-to-size or pipe value, and resells, so earnings track the buy-sell gap set by the steel market rather than any proprietary demand.

Revenue by segment (latest quarter)
Coil (Flat-Roll)	$0.2B
Tubular	$0.0B

Business quality (Solid): A stable, recurring B2B processing model with 230 repeat customers, but structurally low-margin (9% operating) and exposed to steel price swings; returns are disciplined (14% ROE) rather than compounding.

Valuation: At 13× earnings, FRD trades 39% below the Steel Works average (22×). Note: the low multiple may reflect one-time earnings items.

Bull case

Fifteen-ton growth reaccelerates: Quarterly revenue hit $200 million, up 78% year over year, well ahead of the 11% volume increase, indicating both pricing recovery and a broader customer pull-through. (receipt: 10-Q)
Stock trades at a 39% discount to peers: At a P/E of 13.2× versus the Steel Works industry average of 22×, the shares price in persistent margin weakness. If the spread normalizes even modestly, the re-rating potential is large. (receipt: valuation)

Bear case

Nine percent ceiling on the spread: Gross and operating margins both sit at 9%, meaning Friedman passes nearly all steel cost through and keeps only a thin processing fee. A 10% drop in the coil buy-sell spread would roughly halve earnings with no cost lever to offset it. (receipt: 10-Q)
Most of the 78% is price, not volume: Sales volume rose only 11% for the quarter, implying the bulk of the revenue jump came from higher steel prices, not new demand. When the steel cycle cools, the revenue deceleration will be sharp. (receipt: kpi)

Valuation — source: SEC EDGAR (first-party)
Price	$45.03
Market Cap	$324.83M
P/E Ratio	14.1
EV / EBITDA	8.4
Price / Book	1.98
Price / Sales	0.47
FCF Yield	-2.6%
DCF Value (model)	$1.63
DCF Upside vs Price	-96.4%

Profitability & Growth — source: SEC EDGAR
Revenue (TTM)	$444.60M
Net Margin	1.4%
Revenue Growth (YoY)	78.1%
EPS Growth (YoY)	152.1%
FCF Growth (YoY)	-62.5%

Financial Health — source: SEC EDGAR
Altman Z-Score	5.28 (safe)

Valuation vs Sector & Industry
Stock P/E	14.1
Sector P/E (Materials)	23.9
Industry P/E (Steel Works)	21.0
vs Sector	-41.2%
vs Industry	-33.2%

Smart-Money Activity — SEC Form 4 / 13F / Congressional disclosures
Top Institutional Holder	DIMENSIONAL FUND ADVISORS LP ($9.60M)
Institutional Holders Tracked	10

Company
Sector	Materials
Industry	Steel Works
CEO	Michael J. Taylor
Employees	268
Country	US
IPO Date	1980-03-17

Related Companies (Steel Works; 8 comparable companies)

Data as of 2026-09-02.

Figures sourced from U.S. Securities and Exchange Commission (SEC EDGAR) filings and market data. Not personalized investment advice.