Company Overview
Cleveland-Cliffs Inc. operates as a steel producer serving markets in the United States and Canada, offering a diverse portfolio that includes hot-rolled, cold-rolled, and coated products such as aluminized, electrogalvanized, galvalume, galvanneal, and hot-dipped galvanized options, alongside stainless and electrical products. The company functions within the Basic Materials sector and the Steel industry, roles that define its exposure to raw commodity cycles and heavy industrial demand. With a market capitalization of $4.67B, annual revenue of $18.61B, and an employee base of 25,000, the firm represents a significant entity in the production chain. These valuation and revenue figures indicate a substantial operational scale, suggesting the company commands a notable position within the competitive landscape of North American steel manufacturing despite current profitability challenges.
Financial Health
The company reported revenue of $18.61B over the trailing twelve months, yet this generated a net income of -$1,472,999,936, while EBITDA stood at -$126,000,000. The substantial gap between the positive revenue figure and the large negative net income reveals a cost structure where expenses, including cost of goods sold and operating costs, far exceed total sales, resulting in a bottom-line loss that is disproportionately larger than the EBITDA loss. Free cash flow is recorded at -$125,000,000, indicating a consumption of cash reserves rather than generation, which limits the company's current financial flexibility for capital expenditures or strategic acquisitions without external financing. Analysis of the three margins shows a gross margin of -4.6%, an operating margin of -6.3%, and a profit margin of -7.9%, each indicating that the company is losing money at every stage of the value chain, from production costs to final sales. The balance sheet is heavily leveraged, holding $57.00M in cash against $7.97B in debt, a disparity highlighted by a debt-to-equity ratio of 125.97. This high leverage ratio suggests significant financial risk, as the company relies heavily on debt financing relative to its equity base. Liquidity is currently supported by a current ratio of 1.95, which indicates that short-term assets are nearly double the short-term liabilities, providing a buffer against immediate obligations despite the overall loss-making environment. Return on Equity is -21.6% and Return on Assets is -3.8%, metrics that reveal management is currently destroying shareholder value and utilizing assets inefficiently to generate positive returns.
Valuation Assessment
The trailing P/E ratio is listed as N/A due to negative earnings, whereas the forward P/E is 11.02, implying that the market prices expectations for future profitability that would restore positive earnings relative to current share prices. The price-to-book ratio stands at 0.76, indicating that the market values the company at a discount to its book value, suggesting investors are pricing in significant distress or asset liquidation scenarios rather than a premium. Alternative valuation metrics such as a price-to-sales ratio of 0.25 and an EV/EBITDA of -101.44 suggest that traditional multiple-based valuation is not applicable due to negative earnings, pointing instead to a valuation heavily weighted on sales volume and future turnaround potential. The stock has traded between a 52-week high of $16.70 and a 52-week low of $5.63; without a specific current price provided in the facts to calculate the exact percentage deviation, the range defines the recent volatility envelope within which the security has moved. The beta of 1.87 indicates that the stock's price volatility is significantly higher than the broader market, moving with greater intensity than the standard market index, which reflects the cyclical nature of the steel industry.
Growth & Income
Revenue growth year-over-year is -0.3%, while earnings growth is N/A due to the negative earnings position; technically, earnings are not growing faster than revenue because the revenue itself is stagnant while earnings are deeply negative. As the dividend yield is N/A and the payout ratio is 0.0%, the company is not a dividend payer, meaning it retains all available cash flow rather than distributing it to shareholders. This non-dividend status implies the company reinvests earnings, or in this case, seeks to preserve capital, into growth initiatives rather than paying dividends to investors. The overall growth and income profile is characterized by flat revenue, negative earnings expansion, and a total absence of dividend income, presenting a scenario focused on operational survival and future earnings recovery rather than current income generation.