Cleveland-Cliffs Inc. (NYSE: CLF), a leading U.S. steel and iron ore producer, presents a complex financial picture of bottom-line losses, yet also recent positive stock performance, indicating investor optimism about its future. The company, operating in the basic materials sector, is heavily influenced by global steel and iron ore prices, production costs, and trade policies. This analysis will examine Cleveland-Cliffs’ financial status, its stock performance, and the factors affecting its valuation.

Stock Performance: A Sharp Surge in the Last Month

As of July 25, 2025, CLF stock was priced at $11.44, with a daily increase of 4.86%. In after-hours trading, the stock rose further to $11.60. The intraday trading range was between $10.80 and $11.54. The broad 52-week range, from $5.63 to $15.71, indicates significant volatility.

The stock’s recovery in the last month is particularly notable, with a 62.50% surge (monthly change). Year-to-date (YTD), the stock increased by 21.70%, outperforming the S&P 500 index (which rose by 8.62%). Over a one-year period, the stock registered a 25.03% increase compared to the index’s 18.33%. In the five-year timeframe, Cleveland-Cliffs delivered an impressive 102.48% return, surpassing the S&P 500 (which rose by 98.67%). A Beta of 1.91 illustrates the stock’s high volatility relative to the market. The company’s current market capitalization stands at $5.659 billion.

Financial Data: Heavy Losses and Profitability Challenges

Despite the positive stock performance, Cleveland-Cliffs faces significant profitability challenges. The company reported a $483 million loss in its latest quarter, and a net loss of $1.67 billion (TTM) on its bottom line. Diluted EPS for the trailing twelve months was -$3.41, consequently, a trailing P/E ratio is not available. The company’s profit margin stood at -9.03% (TTM), and its Return on Assets (ROA) and Return on Equity (ROE) were negative: -4.49% and -24.11% respectively. Its trailing twelve-month (TTM) revenues amounted to $18.46 billion.

The company reported earnings of -$456 million on revenues of $4.63 billion in Q2 2024 (previous data point in the revenue vs. earnings chart). The company’s free cash flow is negative, standing at -$1.27 billion (TTM). The company’s cash reserves are relatively low at $61 million, while its debt-to-equity ratio is high at 128.25%. The next earnings date is scheduled for July 21, 2025.

Factors Influencing the Stock and Expectations

Despite the challenging financial picture, Cleveland-Cliffs’ stock rally is driven by several factors and expectations. Cost cuts and Trump tariffs: Reports indicate that Cleveland-Cliffs is “riding” cost cuts and Trump tariffs to improve its outlook. Tariff policies protecting domestic steel producers can reduce competition from cheaper imports and enhance the company’s pricing power. Analyst sentiment: Analysts reflect cautious optimism. Out of 11 analysts, 6 rate the stock as “Buy,” 5 as “Hold,” and none rate it as “Sell”. The average price target from analysts is $10.81, slightly below the current stock price of $11.44. However, there are higher price targets (up to $14.00), and an upgrade from KeyBanc contributed to the stock’s rise. Demand for steel: Expectations for improved steel demand, stemming from infrastructure programs or economic recovery, can support the stock. Jim Cramer was even quoted saying “there’s a sense that business will only get better”. Asset sales: The company may consider selling billions of dollars in assets, which could improve its liquidity and reduce its debt burden.

Risks and Challenges

Despite the optimism, Cleveland-Cliffs faces significant risks. Volatility in steel and iron ore prices: As a company in the basic materials sector, it is exposed to sharp fluctuations in commodity prices. Production costs: Energy and raw material costs can impact profit margins. High debt: A high debt-to-equity ratio indicates significant financial risk. Trade policy: While tariffs can currently be supportive, changes in U.S. trade policy could harm the company in the future. Regulation: Companies in this sector are subject to environmental and labor regulations. Poor profitability: Recent financial data shows the company is not profitable on the bottom line, indicating a fundamental challenge in turning losses into profits.

Summary: Cleveland-Cliffs – Turnaround Potential Amidst Major Challenges

Cleveland-Cliffs Inc. presents a picture of a steel company with significant turnaround potential, as reflected in its recent positive stock performance and analyst support. Optimism is driven by expectations for operational improvements, cost cuts, the impact of supportive tariffs, and stable demand. However, the company faces severe financial challenges, including net losses, negative free cash flow, and a high debt level. Cleveland-Cliffs’ ability to translate recent momentum into sustainable profitability and manage its debt burden will be crucial in determining its future trajectory. The information in this article is provided for professional review purposes only and does not constitute investment advice.