Constellium Se (NYSE: CSTM)

Sector: Basic Materials Industry: Aluminum CIK: 0001563411
Market Cap 3.26 Bn
P/B 3.85
P/E 27.09
P/S 0.41
ROIC (Qtr) 8.06
Div Yield % 0.00
Rev 1y % (Qtr) 20.20
Total Debt (Qtr) 2.01 Bn
Debt/Equity (Qtr) 2.38
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About

Constellium SE, also known as CSTM, is a prominent player in the design and manufacture of innovative rolled and extruded aluminum products. The company primarily serves the packaging, aerospace, automotive, defense, and other transportation and industry end-markets. Constellium's business model focuses on adding value by converting aluminum into semi-fabricated and, in some cases, fabricated products, which command higher margins compared to less differentiated, more commoditized semi-fabricated aluminum products. Constellium's operations are...

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Investment thesis

Bull case

  • Healthy cash reserves of 122M provide 3.21x coverage of short-term debt 38M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 258.10M provides exceptional 50.12x coverage of minority interest expenses 5.15M, showing strong core operations.
  • Strong tangible asset base of 5.24B provides 2.60x coverage of total debt 2.01B, indicating robust asset backing and low credit risk.
  • Strong free cash flow of (93.28M) provides 414.56x coverage of acquisition spending (225000), indicating disciplined M&A strategy.
  • Cash position of 122M provides exceptional 23.69x coverage of minority interest expenses 5.15M, indicating strong liquidity.

Bear case

  • Operating cash flow of 258.10M barely covers its investment activities of (263.60M), with a coverage ratio of -0.98, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 122M against inventory of 1.37B, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Investment activities of (263.60M) provide weak support for R&D spending of 44.08M, which is -5.98x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 122M provide limited coverage of acquisition spending of (225000), which is -542.22x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (93.28M) provides weak coverage of capital expenditures of 351.38M, with a -0.27 ratio suggesting additional external financing needs for growth initiatives.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Aluminum
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AA Alcoa Corp 10.68 Bn 24.77 1.02 2.58 Bn
2 CENX Century Aluminum Co 4.58 Bn 56.85 1.81 0.62 Bn
3 CSTM Constellium Se 3.26 Bn 27.09 0.41 2.01 Bn
4 KALU Kaiser Aluminum Corp 2.69 Bn 28.98 2.02 1.07 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.96 1.27
EV to Cash from Ops. EV/CFO 19.95 65.32
EV to Debt EV to Debt 2.56 4.40
EV to EBIT EV/EBIT 15.95 20.60
EV to EBITDA EV/EBITDA 8.04 12.52
EV to Free Cash Flow [EV/FCF] EV/FCF -55.20 -28.70
EV to Market Cap EV to Market Cap 1.58 1.19
EV to Revenue EV/Rev 0.64 1.45
Price to Book Value [P/B] P/B 3.85 3.83
Price to Earnings [P/E] P/E 27.09 34.42
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 7.48
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.80
Dividend per Basic Share Div per Share (Qtr) 0.00 0.87
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 57.58
Interest Coverage Int. cover (Qtr) 3.78 4.59
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 11.12 8.66
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -25.34 64.26
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 8.33
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -9.83 -20.79
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 8.56 74.83
EBIT Growth (1y) % EBIT 1y % (Qtr) 9.22 279.91
EBT Growth (1y) % EBT 1y % (Qtr) 10.15 2,644.71
EPS Growth (1y) % EPS 1y % (Qtr) -4.11 88.41
FCF Growth (1y) % FCF 1y % (Qtr) -36.37 35.98
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.92 40.71
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.49 1.18
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.06
Cash Ratio Cash Ratio (Qtr) 0.07 0.20
Current Ratio Curr Ratio (Qtr) 1.28 1.76
Debt to Equity Ratio Debt/Equity (Qtr) 2.38 1.24
Interest Cover Ratio Int Coverage (Qtr) 3.78 4.59
Times Interest Earned Times Interest Earned (Qtr) 3.78 4.59
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 7.90 10.48
EBIT Margin % EBIT Margin % (Qtr) 4.02 6.61
EBT Margin % EBT Margin % (Qtr) 2.96 5.14
Gross Margin % Gross Margin % (Qtr) 15.80 14.03
Net Profit Margin % Net Margin % (Qtr) 1.50 4.10