Alcoa Corp (AA, Financial), a leading player in the Metals & Mining industry, has witnessed a significant uptick in its stock performance recently. With a market capitalization of $6.03 billion, the company's stock price stands at $33.77, reflecting an 8.59% gain over the past week and an impressive 19.63% gain over the past three months. According to GuruFocus's valuation metrics, Alcoa Corp is currently modestly undervalued, with a GF Value of $40.97, slightly down from the past GF Value of $41.22. This valuation suggests that the stock may still have room to grow, maintaining its status as modestly undervalued both currently and in the past three months.
Company Overview
Alcoa Corp is a vertically integrated aluminum powerhouse, holding the title of the world's largest bauxite miner and alumina refiner by production volume. The company's business operations span across bauxite mining, alumina refining, and primary aluminum manufacturing. With the Aluminum segment as its primary revenue generator, Alcoa's financial fortunes are closely tied to the aluminum supply chain's commodity prices. The majority of its revenue is derived from the United States, positioning it as a significant player in the domestic market. 
Profitability Analysis
Alcoa's Profitability Rank stands at 5/10, indicating a moderate level of profitability within the industry. The company's operating margin is currently at -2.79%, which is better than 41.24% of 856 companies in the Metals & Mining sector. Its Return on Equity (ROE) is -18.29%, surpassing 48.09% of its peers, while the Return on Assets (ROA) at -6.22% is better than 66.68% of the industry. The Return on Invested Capital (ROIC) is -3.33%, which is more favorable than 76.77% of the competition. Over the past decade, Alcoa has managed to achieve profitability in 3 years, outperforming 59.35% of 1,203 companies in the same space. 
Growth Prospects
Alcoa's Growth Rank is currently at 3/10, reflecting a relatively low growth trajectory when compared to industry standards. The company has experienced a 3-Year Revenue Growth Rate per Share of 6.80%, which is better than 37.18% of 589 companies in the Metals & Mining industry. However, the 5-Year Revenue Growth Rate per Share is a modest 0.20%, outperforming 27.13% of 516 companies. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is estimated at -0.36%, which is still better than 25.16% of 155 companies. These figures suggest that while Alcoa has had some growth, it may face challenges in sustaining it in the near future. 
Notable Shareholders
Alcoa's shareholder base includes several prominent investors. Ken Fisher (Trades, Portfolio) holds the largest stake with 2,814,015 shares, accounting for 1.58% of the company's shares. Jeremy Grantham (Trades, Portfolio) follows with 1,114,239 shares, representing 0.62%, and Jim Simons (Trades, Portfolio) holds 825,500 shares, making up 0.46% of the shares. These significant shareholders reflect a vote of confidence in the company's potential and strategic direction.
Competitive Landscape
When compared to its competitors, Alcoa Corp stands out with its $6.03 billion market cap. Constellium SE (CSTM, Financial) follows with a market cap of $2.94 billion, Kaiser Aluminum Corp (KALU, Financial) with $1.14 billion, and Century Aluminum Co (CENX, Financial) closely behind at $1.17 billion. Alcoa's larger market cap suggests a dominant position in the industry, potentially offering a more stable investment opportunity.
Conclusion
In summary, Alcoa Corp's recent stock performance has been robust, with a 19.63% gain over the past three months, signaling investor optimism. The company's valuation remains modestly undervalued according to the GF Value, indicating potential for further growth. While profitability metrics show mixed results, Alcoa's position in the industry is solid, with a few years of profitability over the past decade. Growth prospects appear limited, but the company's significant shareholders remain invested, which could be a positive sign. Compared to its competitors, Alcoa maintains a leading market cap, suggesting a strong competitive stance. Investors should keep an eye on Alcoa as it navigates the volatile metals market and strives for sustainable growth.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
