Where Did Steel Dynamics Stock’s Gains Really Come From?
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Steel Dynamics (STLD) manufactures steel, builds steel joists and deck, and operates a metals recycling business. Before dividends, its stock rose 330.8% from the close of September 30, 2021 to the close of November 2, 2026. A climb that large makes it natural to credit the underlying business for all of it. So how much of that rise do you think came from Steel Dynamics simply selling more?
How Much Did Steel Dynamics’ Sales Grow?
Steel Dynamics generated $22.2 billion in sales over the twelve months to September 30, 2026, up from $15.7 billion in the twelve months to September 30, 2021. This 41.5% increase falls far short of the stock’s climb. When factoring in how the gains compound, sales explain a little under a quarter of the stock’s rise.
While that growth was real and Steel Dynamics is a larger business by sales than it was five years ago, most of the stock’s rise came from other sources.
What Else Lifted Steel Dynamics Stock?
The remaining gains came from a smaller share count and from investors paying more for each dollar of profit. These factors lifted the stock even as the company’s net margin, the share of sales it keeps as profit, grew thinner.
| Source | Then | Now | Share of the stock’s rise |
|---|---|---|---|
| Sales, twelve months | $15.7 billion | $22.2 billion | 23.8% |
| Net margin | 14.7% | 8.8% | -35.1% |
| Price-to-earnings multiple | 5.2 | 18.5 | 87.2% |
| Diluted share count | 204 million | 144 million (-29.7%) | 24.1% |
Then: sales and net margin for the twelve months to Sep 30, 2021, the diluted share count for the quarter ended that day, and the multiple at the close of Sep 30, 2021. Now: the twelve months and the quarter to Sep 30, 2026, and the multiple at the close of Nov 2, 2026. The four shares add up to 100% before rounding. A negative share means that source pulled the price down. Split-adjusted share price, dividends excluded.
Most of the stock’s rise comes from the price-to-earnings multiple, what investors pay for each dollar of profit. That multiple expanded from 5.2 at the close of September 30, 2021 to 18.5 at the close of November 2, 2026.
Steel Dynamics also repurchased stock in each of the past five years, and its diluted share count fell 29.7%. That smaller count added about a quarter of the rise. The margin moved in the opposite direction, shrinking from 14.7% to 8.8%, so the stock rose in spite of it.
Can Margins Recover And Multiples Keep Rising?
Steel Dynamics’ margin ended these five years lower than it began. Over the twelve months to September 30, 2026, it sat well below its ten-year high of 19.8%, a peak reached in the twelve months to June 30, 2022.
The multiple presents a different picture. Measured on quarter-end prices rather than the November 2 close, it stood at 16.2 at the end of September 2026, compared with a range of 2.8 to 22.7 over the past ten years. This was higher than at most quarter ends during that stretch. Neither a margin nor a multiple can climb indefinitely, so a lift from either one does not keep coming back the way sales growth can.
What Steel Dynamics Would Need To Repeat Its Rise
If the margin, the multiple and the share count stayed where they are, Steel Dynamics would need sales to grow 33.2% a year to repeat the stock’s rise over a stretch as long as the last one. Its sales grew 7.2% a year over the past five years.
Sales are currently growing faster, with revenue in the third quarter of fiscal 2026 coming in 34.8% higher than a year earlier. On the October 20, 2026 call, management said the company shipped a record 3.8 million tons of steel in that quarter. They also pointed to strong demand in the steel joists and deck business, where the order backlog is higher than a year ago. Steel Dynamics’ yearly sales growth is the figure to watch, starting with its next report, expected in January 2027.
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