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Universal Stainless Alloy Products Inc
Universal Stainless & Alloy Products, Inc., a smaller-cap stock with a market capitalization of $228.61 million, is not well-known. USAP's stock price has been unpredictable in the past, but over the previous year, it has increased by 48% to close at $15.75 on 10/13/2. Compared to the average US stock, which gained 91% over the same period, this performance is substantially lower.
The company's stock price increased by 3% over the past week. In comparison to the stock's 23% gain over the previous month, the amount represents a significant decline. Over the past 90 days, the stock has been exceptionally volatile, rising by 48%. USAP's stock is currently trading at 86% lower than its 52-week high of $117, which is impressive.
Even though the company's earnings growth has been good, its share price performance has been constrained by deteriorating financial health. Investors should be cautious about the company's prospects because interest expenses exceed its earnings, raising concerns about debt. Over the past two years, Universal Stainless and Alloy Products tripled its debt, which now accounts for 75% of equity. We wouldn't expect debt to rise faster than shareholder capital unless the company had great confidence in its ability to generate profits and hadn't borrowed significantly. Since 2022, interest expenses significantly outstrip revenue. While Universal Stainless and Alloy Products' earnings growth has been excellent, it's important to remember that profits are the primary indicator of a business's prosperity.
After accounting for interest, the business consistently generated an operating profit over the previous three years. During the same time, the company's earnings per share (EPS) grew by 41% year over year, outperforming the 8% annual growth in revenue. EPS grew steadily even as sales stagnated. The company's considerable level of debt isn't helping the situation. The higher risk due to Universal Stainless & Alloy Products' significant level of debt might be to blame for the company's stock's low price. In conclusion, Universal Stainless and Alloy Products have recently experienced a decline in investor attention despite their outstanding revenue growth on the bottom line. Since interest expenses exceed profits, and debt levels are rising, things might be problematic, especially for a company with a small market capitalization. Before making investment choices based on USAP's stock price, it's crucial to be aware of the risks.