# Gerdau (GGBR3.SA)

Canonical: https://gigainvestors.com/s/GGBR3.SA

Analysis as of: 2026-10-16T07:36:15.136Z. Financial observations: FY1998–FY2026.

Listing currency: BRL. Reporting currency: BRL.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: BRL 21.81 per share; close as of 2026-10-15.

Estimated value: low BRL 47.50 per share, central BRL 50.36 per share, high BRL 53.66 per share. Buy at or below the central value BRL 50.36 per share. Valuation as of 2026-10-16T07:36:15.136Z; scenarios are not confidence intervals.

Expected annual return: 43.6% at the stated quote. About 43.6% a year at today's price (required return 17.0%). required return 17.0% a year (BR 10-year bond 13.0% + 4 points).

## Checklist

### understandable: fail

- 5 revenue declines in the last 10 years (informational)

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 5

- Years with a net loss: 1

- Operating margin variation: 0.61×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.03×

- FY2018: 0.09×

- FY2019: 0.08×

- FY2020: 0.13×

- FY2021: 0.28×

- FY2022: 0.21×

- FY2023: 0.13×

- FY2024: 0.09×

- FY2025: 0.06×

- LTM to Jun 2026: 0.07×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 12.0%

- ROIC, second-lowest year: 2.9%

- Typical minus recent gross margin: 2.0 pp

- Typical gross margin (annual median): 13.4%

- Recent gross margin (lower of latest and 3-year median): 11.4%

- Years with nonpositive capital: 0

- Capital spending / revenue: 4.4%

- ROIC including acquisitions, ten-year median: 5.0%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -4.3%

- FY2017: 2.9%

- FY2018: 13.9%

- FY2019: 8.0%

- FY2020: 13.6%

- FY2021: 44.1%

- FY2022: 29.1%

- FY2023: 15.9%

- FY2024: 10.5%

- FY2025: 5.0%

### economics: fail

- owner earnings cash conversion below threshold

- Owner earnings / net income, 5-yr: 0.79×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: BRL 32B

- Net income, five-year total: BRL 40B

- Return on incremental invested capital: 38.5%

- Working capital / revenue, annual change: 0.6 pp

- Working capital / revenue, change between three-year averages: 4.7 pp

- Working capital / revenue, final three-year average: 25.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.99×

- FY2022: 0.96×

- FY2023: 0.66×

- FY2024: 0.33×

- FY2025: -0.64×

### management: fail

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 2.9% vs 10.5%

- Per-share earnings: -1.61 to 2.24 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.1%

- Ordinary dilution, 5-year annual growth: 2.0%

- Market cap gain: BRL 23B

- Cumulative retained earnings: BRL 19B

- Diluted shares, 10-year annual growth: 1.1%

- Diluted shares, 5-year annual growth: 2.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: BRL 3.85

- Per-share value, starting three-year median: BRL -1.61

- Per-share value, ending three-year median: BRL 2.24

- Buybacks concentrated in cheaper years (correlation): -0.14

- Average buyback yield: 2.1%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: BRL 7.1B

- Cumulative net income, 10 years: BRL 43B

- ROIC, first three-year median: 2.9%

- ROIC, last three-year median: 10.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: BRL -1.61

- FY2017: BRL -0.19

- FY2018: BRL 1.31

- FY2019: BRL 0.68

- FY2020: BRL 1.32

- FY2021: BRL 8.65

- FY2022: BRL 6.54

- FY2023: BRL 4.26

- FY2024: BRL 2.24

- FY2025: BRL 0.70

### accounting: pass

- Sloan accruals: -7.8%

- Receivables to sales index (DSRI): 0.90×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 0.0%

- Earnings backed by cash: Yes

- Operating cash / earnings: 5.58×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.24×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -11.7%

- FY2017: -4.8%

- FY2018: 0.6%

- FY2019: -0.8%

- FY2020: -6.4%

- FY2021: 4.0%

- FY2022: 0.4%

- FY2023: -4.9%

- FY2024: -7.8%

- FY2025: -7.8%

## Holders

## Price story

Price needs cash profits to shrink 15.2% a year for ten years · sales -0.5%

Story as of 2026-10-16T10:00:07.122Z; price observation 2026-10-15.

Price needs cash profits to shrink 15.2% a year for ten years

- 2025-07-31: Gerdau's adjusted profit falls near 9% in Q2, tariffs boost US operations ([finance.yahoo.com](https://finance.yahoo.com/news/gerdaus-adjusted-profit-falls-near-235514074.html))

### Sales · FY2025–2026

sales -0.5%; source https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm; observed 2026-03-13.

- FY2017: BRL 37B 

- FY2018: BRL 46B 

- FY2019: BRL 40B 

- FY2020: BRL 44B 

- FY2021: BRL 78B 

- FY2022: BRL 82B 

- FY2023: BRL 69B 

- FY2024: BRL 67B 

- FY2025: BRL 70B 

- FY2026: BRL 70B 

### Gross margin · FY2025

gross margin 11.4%; source https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm; observed 2026-03-13.

- FY2016: 9.2% 

- FY2017: 9.8% 

- FY2018: 13.3% 

- FY2019: 10.6% 

- FY2020: 13.5% 

- FY2021: 26.6% 

- FY2022: 22.8% 

- FY2023: 16.4% 

- FY2024: 13.7% 

- FY2025: 11.4% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in steel; annual sales are BRL 69.9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm (filed 2026-03-13); FY2025: revenue 69858532000; grossProfit 7967493000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GGBR3.SA: Gerdau S.A., together with its subsidiaries, operates as a steel producer company. It operates through Brazil Business, North America Business, and South America Business segments. The company offers rebars, bars, wires, thick plates, hot rolled coils, billets, blooms, plates, wire rods, and structural profiles. It also provides special steel products for agricultural, automotive, construction, distribution, energy, industrial, and mining markets. In addition, it operates mines that produce iron ore located in Brazil. The company was founded in 1901 and is headquartered in São Paulo, Brazil.

### Why customers stay

Margins ranged from 11.4% to 16.4% during 2023–25; it earns 12% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2023: grossProfit / revenue = 16.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2024: grossProfit / revenue = 13.7%.

- Source: https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm (filed 2026-03-13); FY2025: grossProfit / revenue = 11.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); 10-year return on capital observations [[2016,-0.04300363350059203],[2017,0.028947465753625425],[2018,0.13901381610945174],[2019,0.07959950205840585],[2020,0.13574725691255113],[2021,0.4412289379168423],[2022,0.2905953610928482],[2023,0.15903134525118165],[2024,0.1052523114766807],[2025,0.04955609676577177]]; median 0.1204997841946159. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back BRL 1.2 billion of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2017: growth capex 0; upkeep 911268000; owner earnings 842616000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2018: growth capex 0; upkeep 1262322000; owner earnings 2955874000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2019: growth capex 0; upkeep 1846913000; owner earnings 1283415200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2020: growth capex 0; upkeep 1805028000; owner earnings 2888544200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2021: growth capex 533772000; upkeep 2658561000; owner earnings 15310438000. Growth capex / owner earnings = 0.0348632743230468.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2022: growth capex 1366216942.5645866; upkeep 3115038057.4354134; owner earnings 10971044342.564587. Growth capex / owner earnings = 0.12452934286885038.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2023: growth capex 0; upkeep 5336323000; owner earnings 4956933600. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); FY2024: growth capex 0; upkeep 5946417000; owner earnings 1490013200. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); Dividend observations: [[2016,85962000],[2017,86386000],[2018,599099000],[2019,484173000],[2020,274815000],[2021,5339426000],[2022,5891690000],[2023,2683328000],[2024,1656414000],[2025,1285673000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm (filed 2026-03-13); FY2025: cash repurchases 1169314000 BRL.

### Are managers owners

Insiders own 98% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); GGBR3.SA SharesStats.PercentInsiders = 98.044 percentage points; cache date 2026-10-16.

### What could break it

Section 301 tariffs targeting Chinese steel were established in 2018 and maintained through the Biden administration.

- Source: https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm (filed 2026-03-13); By 2019, tariffs were removed for Canada and Mexico in favor of volume monitoring. Additionally, Section 301 tariffs targeting Chinese steel were established in 2018 and maintained through the Biden administration. In 2022, the 25% tariffs for the EU, UK, and Japan were transitioned into tariff-rate quotas, which defined the trade landscape until the recent universal reinstatements.

### What the price says

The price assumes cash profits shrink 15.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-13); Ten-year compound average after fade. Initial solved rate -0.2236324565702819. Price 21.81; FX 1; discount 0.1695; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -2.506607818077861 → FY2025 -0.44744214232563523. Closing-price date 2026-10-15.

## Monthly share-price history (BRL per share)

- 2016-11: BRL 7.52 per share

- 2016-12: BRL 6.27 per share

- 2017-01: BRL 6.85 per share

- 2017-02: BRL 7.24 per share

- 2017-03: BRL 8.37 per share

- 2017-04: BRL 7.67 per share

- 2017-05: BRL 7.51 per share

- 2017-06: BRL 8.06 per share

- 2017-07: BRL 8.44 per share

- 2017-08: BRL 9.34 per share

- 2017-09: BRL 8.75 per share

- 2017-10: BRL 8.60 per share

- 2017-11: BRL 7.57 per share

- 2017-12: BRL 8.23 per share

- 2018-01: BRL 9.81 per share

- 2018-02: BRL 10.75 per share

- 2018-03: BRL 10.44 per share

- 2018-04: BRL 11.17 per share

- 2018-05: BRL 9.09 per share

- 2018-06: BRL 8.51 per share

- 2018-07: BRL 9.87 per share

- 2018-08: BRL 10.10 per share

- 2018-09: BRL 10.60 per share

- 2018-10: BRL 10.29 per share

- 2018-11: BRL 9.66 per share

- 2018-12: BRL 9.71 per share

- 2019-01: BRL 10.08 per share

- 2019-02: BRL 9.90 per share

- 2019-03: BRL 9.68 per share

- 2019-04: BRL 9.22 per share

- 2019-05: BRL 9.16 per share

- 2019-06: BRL 9.92 per share

- 2019-07: BRL 9.39 per share

- 2019-08: BRL 8.72 per share

- 2019-09: BRL 8.72 per share

- 2019-10: BRL 8.85 per share

- 2019-11: BRL 11.34 per share

- 2019-12: BRL 13.58 per share

- 2020-01: BRL 14.51 per share

- 2020-02: BRL 11.73 per share

- 2020-03: BRL 7.38 per share

- 2020-04: BRL 8.53 per share

- 2020-05: BRL 8.73 per share

- 2020-06: BRL 10.67 per share

- 2020-07: BRL 11.69 per share

- 2020-08: BRL 12.73 per share

- 2020-09: BRL 13.50 per share

- 2020-10: BRL 14.37 per share

- 2020-11: BRL 14.76 per share

- 2020-12: BRL 16.10 per share

- 2021-01: BRL 15.67 per share

- 2021-02: BRL 16.85 per share

- 2021-03: BRL 19.24 per share

- 2021-04: BRL 21.93 per share

- 2021-05: BRL 22.02 per share

- 2021-06: BRL 20.18 per share

- 2021-07: BRL 20.75 per share

- 2021-08: BRL 18.52 per share

- 2021-09: BRL 17.63 per share

- 2021-10: BRL 17.65 per share

- 2021-11: BRL 16.70 per share

- 2021-12: BRL 17.83 per share

- 2022-01: BRL 17.94 per share

- 2022-02: BRL 16.13 per share

- 2022-03: BRL 19.10 per share

- 2022-04: BRL 17.45 per share

- 2022-05: BRL 18.17 per share

- 2022-06: BRL 14.16 per share

- 2022-07: BRL 15.56 per share

- 2022-08: BRL 15.63 per share

- 2022-09: BRL 15.94 per share

- 2022-10: BRL 17.33 per share

- 2022-11: BRL 20.25 per share

- 2022-12: BRL 19.45 per share

- 2023-01: BRL 21.41 per share

- 2023-02: BRL 19.17 per share

- 2023-03: BRL 18.61 per share

- 2023-04: BRL 18.74 per share

- 2023-05: BRL 17.61 per share

- 2023-06: BRL 18.83 per share

- 2023-07: BRL 21.97 per share

- 2023-08: BRL 20.03 per share

- 2023-09: BRL 18.52 per share

- 2023-10: BRL 16.72 per share

- 2023-11: BRL 17.08 per share

- 2023-12: BRL 17.80 per share

- 2024-01: BRL 16.50 per share

- 2024-02: BRL 16.84 per share

- 2024-03: BRL 16.68 per share

- 2024-04: BRL 16.22 per share

- 2024-05: BRL 16.12 per share

- 2024-06: BRL 16.35 per share

- 2024-07: BRL 15.90 per share

- 2024-08: BRL 16.21 per share

- 2024-09: BRL 16.87 per share

- 2024-10: BRL 17.86 per share

- 2024-11: BRL 19.60 per share

- 2024-12: BRL 16.97 per share

- 2025-01: BRL 15.87 per share

- 2025-02: BRL 15.69 per share

- 2025-03: BRL 15.36 per share

- 2025-04: BRL 14.68 per share

- 2025-05: BRL 14.54 per share

- 2025-06: BRL 14.56 per share

- 2025-07: BRL 14.60 per share

- 2025-08: BRL 15.16 per share

- 2025-09: BRL 14.73 per share

- 2025-10: BRL 16.06 per share

- 2025-11: BRL 16.80 per share

- 2025-12: BRL 17.47 per share

- 2026-01: BRL 19.00 per share

- 2026-02: BRL 17.86 per share

- 2026-03: BRL 17.69 per share

- 2026-04: BRL 19.42 per share

- 2026-05: BRL 19.21 per share

- 2026-06: BRL 17.84 per share

- 2026-07: BRL 21.49 per share

- 2026-08: BRL 20.44 per share

- 2026-09: BRL 20.64 per share

- 2026-10: BRL 22.12 per share

## Annual estimated value (BRL per share)

- FY2016: low BRL 7.12 per share, central BRL 7.41 per share, high BRL 7.73 per share

- FY2017: low BRL 4.29 per share, central BRL 4.48 per share, high BRL 4.70 per share

- FY2018: low BRL 4.91 per share, central BRL 5.15 per share, high BRL 5.43 per share

- FY2019: low BRL 6.13 per share, central BRL 6.33 per share, high BRL 6.57 per share

- FY2020: low BRL 8.56 per share, central BRL 8.88 per share, high BRL 9.26 per share

- FY2021: low BRL 22.18 per share, central BRL 26.69 per share, high BRL 28.60 per share

- FY2022: low BRL 23.81 per share, central BRL 29.18 per share, high BRL 31.36 per share

- FY2023: low BRL 20.85 per share, central BRL 24.24 per share, high BRL 25.97 per share

- FY2024: low BRL 17.56 per share, central BRL 18.53 per share, high BRL 19.64 per share

- FY2025: low BRL 17.77 per share, central BRL 18.82 per share, high BRL 20.02 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

Prior published observations retained from 2026-10-15T06:41:56.752Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 20-F filing](https://www.sec.gov/Archives/edgar/data/1073404/000110465926027678/ggb-20251231x20f.htm); period 2025-12-31, filed 2026-03-13.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations