Cleveland-Cliffs (CLF) AI Stock Analysis

• Market Cap: $4.26B
• Dividend Yield: N/A
• Average Volume (3M): 21.34M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.40
• Revenue Growth: -15.00%
• EPS Growth: -423.14%
• Country: US
• Employees: 30,000
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Steel
• EPS (TTM): -0.92
• Shares Outstanding: 494,485,260
• 10 Day Avg. Volume: 15,720,224
• 30 Day Avg. Volume: 21,335,921
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 2.94
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 178.83
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $11.86
• Price Target Upside: 65.87% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

Cleveland-Cliffs is currently navigating a challenging landscape with significant financial performance issues, including negative profitability and cash flow struggles. The stock's technical indicators reflect a bearish trend, and the valuation is undermined by losses and a lack of dividend yield. While the earnings call provided some optimism with strategic initiatives aimed at recovery, the overall risk remains high due to operational and market uncertainties.

Positive Factors

Contract Conclusion

The conclusion of the unprofitable five-year slab contract with Calvert at year-end could potentially improve EBITDA by $500m under the current price environment.

Market Position

Cleveland-Cliffs has transformed itself from an iron ore miner to the largest integrated steelmaker in North America through the acquisition of two of its largest customers, AK Steel and ArcelorMittal USA.

Operational Efficiency

Cliffs expects $300m in annual incremental EBITDA/capex savings from operational changes.

Negative Factors

Debt Levels

Cliffs' net debt increased from $7.0bn to $7.5bn, making debt reduction the top priority.

Financial Performance

Cliffs reported a 1Q EBITDA loss of $174m, significantly higher than expected, due to underperforming non-core assets and the lag-effect of lower index prices.

Market Demand

Cleveland Cliffs will idle three steelmaking facilities due to sluggish demand and low pricing for steel products.

Cleveland-Cliffs Business Overview & Revenue Model

Company Description

Cleveland-Cliffs Inc. operates as a flat-rolled steel producer in North America. The company offers carbon steel products, such as hot-rolled, cold-rolled, electrogalvanized, hot-dip galvanized, hot-dip galvannealed, aluminized, enameling, and advanced high-strength steel products; stainless steel products; plates; and grain oriented and non-oriented electrical steel products. It also provides tubular components, including carbon steel, stainless steel, and electric resistance welded tubing. In addition, the company offers tinplate products, such as electrolytic tin coated and chrome coated sheet, and tin mill products; tooling and sampling; raw materials; ingots, rolled blooms, and cast blooms; and hot-briquetted iron products. Further, it owns five iron ore mines in Minnesota and Michigan. The company serves automotive, infrastructure and manufacturing, distributors and converters, and steel producers. Cleveland-Cliffs Inc. was formerly known as Cliffs Natural Resources Inc. and changed its name to Cleveland-Cliffs Inc. in August 2017. The company was founded in 1847 and is headquartered in Cleveland, Ohio.

How the Company Makes Money

Cleveland-Cliffs generates revenue primarily through the sale of its iron ore and steel products. The company's revenue model is centered on mining iron ore from its reserves, which is then processed into pellets and used in steel production. The integrated steelmaking process allows the company to produce a wide array of steel products, catering to diverse industries such as automotive, construction, and appliances. Additionally, Cleveland-Cliffs benefits from long-term supply contracts with major customers and strategic partnerships, which help stabilize its revenue streams. The company's earnings are also influenced by factors such as market demand for steel, raw material costs, and global steel pricing trends.

Cleveland-Cliffs Financial Statement Overview

Summary

Cleveland-Cliffs faces significant financial challenges with negative margins and declining revenue. The leverage risk is high due to increased debt, and cash flow problems emphasize operational inefficiencies. Despite maintaining equity levels, the financial outlook is concerning.

Income Statement

Cleveland-Cliffs has faced significant challenges in its income statement. The Gross Profit Margin has deteriorated with the company reporting negative EBIT and EBITDA in the most recent year. The Net Profit Margin turned negative in 2024, reflecting a concerning decline from previous years where the company was profitable. Revenue Growth Rate from 2023 to 2024 was negative, indicating a contraction in sales. This negative trajectory suggests struggles in maintaining profitability and growth in a competitive steel industry.

Balance Sheet

The balance sheet shows a mixed picture. The Debt-to-Equity Ratio increased due to rising total debt, posing a leverage risk. However, the company has a relatively stable equity position compared to its historical data. The Return on Equity (ROE) is negative due to losses, indicating inefficiencies in generating returns on shareholder investments. Despite a high level of total liabilities, the company maintains a moderate Equity Ratio, suggesting some balance between assets and equity.

Cash Flow

The cash flow statement highlights pressing concerns with a substantial decline in Free Cash Flow, which turned negative in 2024. This represents a significant downturn in cash generation capabilities. The Operating Cash Flow to Net Income Ratio is positive, which is a small positive indicator amidst otherwise negative cash flow metrics. However, the Free Cash Flow to Net Income Ratio is negative, highlighting operational challenges in translating profits into cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
19.18B	22.00B	22.99B	20.44B	5.35B
	Gross Profit
70.00M	1.39B	2.52B	4.53B	252.00M
	EBIT
-756.00M	677.00M	1.94B	4.01B	5.00M
	EBITDA
378.00M	1.86B	3.11B	5.04B	310.00M
	Net Income Common Stockholders
-754.00M	399.00M	1.33B	2.99B	-82.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
54.00M	198.00M	26.00M	48.00M	112.00M
	Total Assets
20.95B	17.54B	18.75B	18.98B	16.77B
	Total Debt
7.07B	3.14B	4.25B	5.24B	5.39B
	Net Debt
7.01B	2.94B	4.22B	5.19B	5.28B
	Total Liabilities
14.05B	9.41B	10.71B	13.20B	14.43B
	Stockholders Equity
6.66B	7.89B	8.04B	5.77B	2.03B
Cash Flow		Free Cash Flow
-590.00M	1.62B	1.48B	2.08B	-786.00M
	Operating Cash Flow
105.00M	2.27B	2.42B	2.79B	-261.00M
	Investing Cash Flow
-3.21B	-591.00M	-936.00M	-1.38B	-2.04B
	Financing Cash Flow
2.97B	-1.50B	-1.51B	-1.47B	2.06B

Cleveland-Cliffs Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 7.15
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLF, the sentiment is Negative. The current price of 7.15 is below the 20-day moving average (MA) of 7.81, below the 50-day MA of 8.61, and below the 200-day MA of 11.13, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 38.64 is Neutral, neither overbought nor oversold. The STOCH value of 42.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CLF.

Cleveland-Cliffs Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RS	78 Outperform	$15.55B	21.15	10.27%	1.51%	-5.60%	-35.05%
NUE	73 Outperform	$26.96B	21.45	6.54%	1.89%	-10.88%	-66.97%
STLD	73 Outperform	$20.23B	17.84	13.08%	1.44%	-7.42%	-48.08%
MT	67 Neutral	$24.78B	17.85	2.60%	1.42%	-8.56%	68.36%
X	60 Neutral	$9.57B	145.59	0.86%	0.49%	-14.79%	-88.78%
Sector *	49 Neutral	$1.94B	-1.23	-21.28%	3.73%	1.19%	-29.73%
CLF	41 Neutral	$4.26B	―	-17.27%	―	-15.00%	-423.14%

Cleveland-Cliffs Corporate Events

Cleveland-Cliffs Appoints Jane M. Cronin to Board

Cleveland-Cliffs Inc. has appointed Jane M. Cronin to its Board of Directors, with her role effective immediately. Ms. Cronin is recognized as an independent director and will serve on the Audit Committee, receiving compensation similar to other nonemployee directors. The company has also planned to enter into an Indemnification Agreement with her, ensuring protection against expenses related to her Board service.