Time To Buy Century Aluminum Stock?

Century Aluminum (NASDAQ:CENX) stock looks risky – making it a bad pick to buy at its current price of around $22. We believe there are a few concerns with CENX stock, which makes it risky despite its current valuation being low.

We arrive at our conclusion by comparing the current valuation of CENX stock with its operating performance over the recent years as well as its current and historical financial condition. Our analysis of Century Aluminum along key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience shows that the company has a weak operating performance and financial condition, as detailed below. However, for investors who seek lower volatility than individual stocks, the Trefis High Quality portfolio presents an alternative – having outperformed the S&P 500 and generated returns exceeding 91% since its inception.

How Does Century Aluminum’s Valuation Look vs. The S&P 500?

Going by what you pay per dollar of sales or profit, CENX stock looks cheap compared to the broader market.

• Century Aluminum has a price-to-sales (P/S) ratio of 0.9 vs. a figure of 3.1 for the S&P 500
• And, it has a price-to-earnings (P/E) ratio of 17.3 vs. the benchmark’s 26.9

How Have Century Aluminum’s Revenues Grown Over Recent Years?

Century Aluminum’s Revenues have seen notable growth over recent years.

• Century Aluminum has seen its top line decline at an average rate of 1.4% over the last 3 years (vs. increase of 5.5% for S&P 500)
• Its revenues have grown 11.4% from $2.1 Bil to $2.4 Bil in the last 12 months (vs. growth of 5.5% for S&P 500)
• Also, its quarterly revenues grew 29.5% to $634 Mil in the most recent quarter from $490 Mil a year ago (vs. 4.8% improvement for S&P 500)

How Profitable Is Century Aluminum?

Century Aluminum’s profit margins are much worse than most companies in the Trefis coverage universe.

• Century Aluminum’s Operating Income over the last four quarters was $166 Mil, which represents a poor Operating Margin of 7.0%
• Century Aluminum’s Operating Cash Flow (OCF) over this period was $63 Mil, pointing to a very poor OCF Margin of 2.6% (vs. 14.9% for S&P 500)
• For the last four-quarter period, Century Aluminum’s Net Income was $120 Mil – indicating a poor Net Income Margin of 5.1% (vs. 11.6% for S&P 500)

Does Century Aluminum Look Financially Stable?

Century Aluminum’s balance sheet looks weak.

• Century Aluminum’s Debt figure was $483 Mil at the end of the most recent quarter, while its market capitalization is $2.1 Bil (as of 7/21/2025). This implies a moderate Debt-to-Equity Ratio of 23.3% (vs. 19.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is desirable]
• Cash (including cash equivalents) makes up $45 Mil of the $2.0 Bil in Total Assets for Century Aluminum.  This yields a poor Cash-to-Assets Ratio of 2.3%

How Resilient Is CENX Stock During A Downturn?

CENX stock has fared worse than the benchmark S&P 500 index during some of the recent downturns. While investors have their fingers crossed for a soft landing by the U.S. economy, how bad can things get if there is another recession? Our dashboard How Low Can Stocks Go During A Market Crash captures how key stocks fared during and after the last six market crashes.

Inflation Shock (2022)

• CENX stock fell 82.1% from a high of $29.49 on 4 March 2022 to $5.28 on 30 September 2022, vs. a peak-to-trough decline of 25.4% for the S&P 500
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is 23.94 on 3 December 2024 and currently trades at around $22

Covid Pandemic (2020)

• CENX stock fell 62.1% from a high of $8.02 on 7 January 2020 to $3.04 on 3 April 2020, vs. a peak-to-trough decline of 33.9% for the S&P 500
• The stock fully recovered to its pre-Crisis peak by 31 July 2020

Global Financial Crisis (2008)

• CENX stock fell 98.7% from a high of $79.99 on 20 May 2008 to $1.06 on 9 March 2009, vs. a peak-to-trough decline of 56.8% for the S&P 500
• The stock is yet to recover to its pre-Crisis high

Putting All The Pieces Together: What It Means For CENX Stock

In summary, Century Aluminum’s performance across the parameters detailed above are as follows:

• Growth: Very Strong
• Profitability: Very Weak
• Financial Stability: Weak
• Downturn Resilience: Very Weak
• Overall: Weak

Hence, despite its low valuation, this makes the stock look risky, which supports our conclusion that CENX is currently a bad stock to buy.

While CENX stock looks volatile, investing in a single stock can be risky. On the other hand, the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

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