Cleveland-Cliffs (CLF) AI Stock Analysis

• Market Cap: $3.44B
• Dividend Yield: N/A
• Average Volume (3M): 24.10M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: -12.78%
• EPS Growth: -301.57%
• Country: US
• Employees: 30,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): -1.57
• Shares Outstanding: 494,485,260
• 10 Day Avg. Volume: 26,562,879
• 30 Day Avg. Volume: 24,098,788
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.24
• Price to Cash Flow (P/CF): -2.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $12.77
• Price Target Upside: 73.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8

Cleveland-Cliffs faces significant financial challenges with declining profitability and increased leverage, impacting its stock score negatively. While technical analysis and valuation raise concerns, positive elements from the earnings call, including strategic initiatives and future guidance, provide some optimism for recovery. The overall score reflects a cautious outlook amid financial and operational uncertainties.

Positive Factors

Market Position

Cleveland-Cliffs has transformed itself into the largest integrated steelmaker in North America by acquiring AK Steel and ArcelorMittal USA.

Operational Efficiency

The temporary closure of the Dearborn steel mill, offset by the return of the Cleveland C6 blast furnace, is aimed at increasing efficiency by operating Cleveland at full capacity.

Trade Policies

The stock is expected to trade higher based on tariff news on Canada and Mexico, potentially benefiting from increased trade protections and higher steel prices.

Negative Factors

Debt Levels

Reported a net debt position of $7.0bn, above consensus estimates, resulting in a high net debt/adjusted EBITDA ratio of 9.0x.

Financial Performance

Cleveland Cliffs reports disappointing 4Q24 results with revenue and non-GAAP EPS missing estimates.

Market Demand

2024 steel demand is projected to be the worst since 2010, excluding the impact of Covid in 2020.

Cleveland-Cliffs Business Overview & Revenue Model

Company Description

Cleveland-Cliffs Inc. is a leading vertically integrated producer of iron ore and steel products in North America. The company operates in both the mining and steel manufacturing sectors, with core products including iron ore pellets, flat-rolled carbon steel, stainless steel, and electrical steel products. Headquartered in Cleveland, Ohio, Cleveland-Cliffs serves various industries, including automotive, infrastructure, and manufacturing, with a focus on providing high-quality steel solutions.

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 is facing significant challenges with declining revenues and profitability in the steel industry. The income statement shows negative EBIT and EBITDA, and a concerning negative net profit margin. The balance sheet indicates increased leverage risk, while the cash flow statement reveals negative free cash flow, highlighting operational difficulties in generating cash.

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: 7.34
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 7.34 is below the 20-day moving average (MA) of 8.87, below the 50-day MA of 9.90, and below the 200-day MA of 11.92, indicating a bearish trend. The MACD of -0.49 indicates Positive momentum. The RSI at 32.72 is Neutral, neither overbought nor oversold. The STOCH value of 10.33 is Positive, 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	77 Outperform	$14.00B	16.87	11.71%	1.70%	-6.56%	-31.89%
MT	73 Outperform	$20.49B	14.56	2.60%	1.75%	-8.56%	68.36%
STLD	73 Outperform	$16.37B	11.09	17.27%	1.72%	-6.68%	-32.96%
NUE	71 Outperform	$23.82B	12.20	9.79%	2.08%	-11.46%	-53.33%
X	57 Neutral	$8.67B	24.50	3.43%	0.45%	-13.48%	-56.94%
CLF	48 Neutral	$3.44B	―	-10.36%	―	-12.78%	-301.57%
Sector *	47 Neutral	$2.32B	-2.86	-21.68%	3.65%	4.18%	-28.49%

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.