The case for & against
Bull & Bear analysis
Bearish
Algoma Steel Group Inc. (NASDAQ: ASTL) operates as a leading integrated steel producer in Canada, specializing in the manufacture of plates and hot-rolled coil products. The company is undergoing a significant transformation from traditional blast furnace operations to electric arc furnace (EAF) technology, which emphasizes sustainability and operational efficiency. Algoma's strategic pivot aligns its operations with national priorities, particularly in defense and infrastructure, amidst the challenges presented by geopolitical tensions and supply chain disruptions.
Bull says
- ↑Completed EAF conversion aligns with sustainable steel demand
- ↑Net sales realization rose 21% YoY to $1,193 per ton
- ↑$553 million liquidity supports EAF ramp and strategic capex
- ↑Canada’s sole plate producer taps defense and infrastructure markets
- ↑Joint ventures secure roles in Canadian defense and industrial supply
- ↑Strong balance sheet quality with healthy leverage and analyst upgrade momentum
Bear says
- ↓Adjusted EBITDA loss of CAD 28.7 million; margin at –9.7%
- ↓Shipments down 52.4% YoY drove revenue down 42.4% to CAD 266.9 million
- ↓CAD 27.4 million in tariff costs erodes pricing power
- ↓Domestic coil oversupply creates pricing pressure and weak demand
- ↓Negative profitability and earnings yield metrics warn on valuation
- ↓Underperformance momentum amid EAF transition uncertainties
Earnings Call · Q4 2025 · Mgmt. Guidance
Updated 04-09-2026neutral
Transcript signals
Bull points
- we expect to have total shipments between 1 and 1.2 million tons over the course of the year, with a ramp as we are building up our capacity at DAF, indicating growth as the year progresses.
- Our first EF unit is running on a full 24-hour schedule, and our second unit remains on schedule.
- We are already shipping Davie shipbuilders for the Polar Max program, and the Hanwha Ocean MOU opens a further compelling path into Canada's defense and industrial supply chain.
Bear points
- We shipped 378,000 net tons in the quarter, down 31% versus the prior year quarter. The decrease in shipments was largely attributable to the impact of U.S. tariffs, which, as Rajat said, effectively closed that market to our products.
- This resulted in steel revenue of $408 million in the quarter, down 23.9% versus the prior year period, as the lower shipment volumes more than offset higher realized prices.
- Adjusted EBITDA for the full year was a loss of $261.4 million, representing an adjusted EBITDA margin of minus 12.5%, compared to an adjusted EBITDA gain of $22.4 million and an adjusted EBITDA margin of 0.9% in calendar 2024. The decrease was primarily attributable to lower shipments.
Read full transcript analysis ›