One-glance verdict
Undervalued
$24.64 our estimate vs market $13.38
Wall Street consensus: $14.05 (-43.0% lower than our fair-value estimate)
46% below our estimate, below the bear case
Fundamentals snapshot
Cleveland-Cliffs Inc.
CLF · NYQ · Basic Materials · Steel
Current price
$13.38
52-week range
$7.73 - $15.35
Market cap
$7.63B
Balance sheet
Distressed
-2.45x Concerning
Net debt $7.59B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 7.9% last year.
- Reward Free cash flow was positive in 6/10 years.
- Risk Net debt grew 70.4% over 3 years.
- Risk Return on equity was -7.3% last year — the company lost money on shareholders' equity.
What this company does
Cleveland-Cliffs Inc.
Cleveland-Cliffs is a major steel producer that makes all sorts of steel products, from the kind used in cars to those for buildings and appliances. The company makes most of its money by selling these steel products, which are essential for many industries.
How the company got here
Cleveland-Cliffs has a long history, starting in 1847 as the Cleveland Iron Mining Company. For most of its existence, it was primarily an iron ore supplier to the steel industry. A major turning point came in 2020 when the company acquired AK Steel and then ArcelorMittal USA. These acquisitions transformed Cleveland-Cliffs from a mining company into a fully integrated steel producer, making it the largest flat-rolled steel producer in North America. This strategic shift was driven by a desire to control more of the steel production process and focus on higher-value steel products.
What it actually does
Cleveland-Cliffs produces a wide variety of steel products that are essential for many industries. Think of the steel in your car, the appliances in your kitchen, or the structures that build our cities – much of that could come from Cleveland-Cliffs. They make everything from basic carbon steel to specialized stainless and electrical steels. Beyond just making the raw steel, they also process it further into things like tubing and stamped parts, offering a complete solution for their customers.
Steelmaking
This is the core of Cleveland-Cliffs' business, where they transform raw materials like iron ore and scrap metal into various types of steel. They operate large facilities that use processes like basic-oxygen furnaces and electric-arc furnaces to melt and refine the materials. The steel produced here is then used in many applications, from car parts to construction materials. This segment is the largest part of the company's operations, forming the backbone of its integrated steel production.
Iron Ore Mining and Pellets
Before steel can be made, you need iron ore, and Cleveland-Cliffs mines a significant amount of it. They operate mines in Minnesota and Michigan, extracting iron ore and then processing it into pellets. These pellets are essentially concentrated iron ore, making them easier to transport and use in the steelmaking process, particularly in blast furnaces. This upstream operation ensures a steady supply of a key ingredient for their own steel production and also for sale to other steelmakers.
Hot-Dipped Galvanized, Aluminized, and Coated Steels
This segment focuses on adding protective coatings to steel to enhance its durability and resistance to corrosion, which is especially important for products exposed to the elements. For example, hot-dipped galvanized steel involves coating steel with zinc, making it rust-resistant, a common feature in automotive parts and construction materials. Aluminized steel, coated with aluminum, offers similar protective qualities. These coated products are vital for industries like automotive and construction where longevity and protection against rust are critical.
Tubular Components
This part of the business manufactures various types of steel tubing. These tubes are used in a wide range of applications, from automotive components like exhaust systems to industrial uses. Cleveland-Cliffs produces both carbon steel and stainless steel tubing, catering to different needs for strength, corrosion resistance, and other performance characteristics. This segment adds value by taking basic steel and shaping it into specific, functional components for other manufacturers.
Tooling and Stamping
Here, Cleveland-Cliffs goes a step further by creating the tools used to shape metal and also performing the stamping process itself. This involves using large presses to cut and form steel into specific shapes, often for automotive parts like car body panels. They also design and build the complex dies (the molds for stamping) that are essential for mass-producing these parts accurately. This segment is crucial for their automotive customers, providing them with finished or near-finished components.
What management is betting on now
Cleveland-Cliffs' management is focused on making the company a leader in producing high-value, specialized steel products rather than just commodity steel. They are investing in technology and innovation to create steel that meets demanding customer requirements, particularly in the automotive sector. The strategy also emphasizes controlling the entire production process, from mining raw materials to manufacturing finished components, to ensure quality and reliability. This vertical integration aims to improve profitability and create a more resilient business for the future.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-677.00M
FY2025 Q1
$-503.00M
FY2025 Q2
$-67.00M
FY2025 Q3
$-300.00M
FY2025 Q4
$-153.00M
FY2026 Q1
$-477.00M
FY2026 Q2
$73.00M
FY2026 Q3
$72.00M
Revenue
$5.61B
Net income
$152.00M
Diluted EPS
0.26
Operating cash flow
$224.00M
Free cash flow
$72.00M
Fetching…
Sources
Revenue
$5.23B
Net income
$-145.00M
Diluted EPS
-0.25
Operating cash flow
$230.00M
Free cash flow
$73.00M
Fetching…
Sources
Revenue
$4.92B
Net income
$-237.00M
Diluted EPS
-0.42
Operating cash flow
$-325.00M
Free cash flow
$-477.00M
Fetching…
Sources
Revenue
$4.31B
Net income
$-243.00M
Diluted EPS
-0.41
Operating cash flow
$-13.00M
Free cash flow
$-153.00M
Fetching…
Sources
Revenue
$4.73B
Net income
$-251.00M
Diluted EPS
-0.51
Operating cash flow
$-143.00M
Free cash flow
$-300.00M
Fetching…
Sources
Revenue
$4.93B
Net income
$-486.00M
Diluted EPS
-0.98
Operating cash flow
$45.00M
Free cash flow
$-67.00M
Fetching…
Sources
Revenue
$4.63B
Net income
$-498.00M
Diluted EPS
-1.01
Operating cash flow
$-351.00M
Free cash flow
$-503.00M
Fetching…
Sources
Revenue
$4.33B
Net income
$-447.00M
Diluted EPS
-0.91
Operating cash flow
$-472.00M
Free cash flow
$-677.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $24.64 vs current price $13.38
Wall Street consensus is the average analyst price target: $14.05 (-43.0% lower than our fair-value estimate).
Our most-likely fair value is $24.64 a share — about 84.1% above today's price of $13.38, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $7.6B. Interest coverage -2.4x.
Net debt
$7.59B
Interest coverage
-2.45x
Cleveland-Cliffs Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
CLF
BASELINE
Cleveland-Cliffs Inc.
Total debt $7.66B Interest coverage -2.45x This is the baseline the peer rows are being compared against.
Total debt $7.10B Interest coverage 15.64x This peer still has a real interest-payment cushion, while CLF does not.
Total debt $4.41B Interest coverage 22.83x This peer still has a real interest-payment cushion, while CLF does not.
Total debt $3.61B Interest coverage 6.07x This peer still has a real interest-payment cushion, while CLF does not.
Total debt $14.42B Interest coverage 2.53x This peer still has a real interest-payment cushion, while CLF does not.
What you should know
The case for and against CLF
2 Rewards
3 Risks
Rewards
-
Revenue grew 7.9% last year.
-
Free cash flow was positive in 6/10 years.
Risks
-
Net debt grew 70.4% over 3 years.
-
Return on equity was -7.3% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 8.6% to 6.7% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
9.16x
P/B
1.34x
P/S
0.38x
EV/EBITDA
15.23x
PEG ratio
0.43x
Profitability
How much profit each dollar creates
Gross margin
1.5%
Operating margin
6.7%
Net margin
-2.4%
ROE
-7.3%
ROA
-0.1%
Health
Liquidity and balance-sheet strength
Debt / equity
1.28x
Current ratio
1.87x
Quick ratio
0.59x
Total debt
$7.66B
Total cash
$77.00M
Growth
How the business has been compounding
Revenue TTM
$20.07B
Revenue 5Y CAGR
-2.3%
EPS TTM
-0.80
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$116.00M
Free CF TTM
$-1.02B
FCF margin
-5.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2020-04-02