Buy Or Fear Cleveland-Cliffs Stock At $11?

Core Viewpoint - Cleveland-Cliffs has seen a 14% increase in stock price year-to-date, but its operational performance and financial health are concerning, making it vulnerable to cyclical fluctuations in steel prices [2] Financial Performance - In Q2 2025, Cleveland-Cliffs reported revenues of $5.8 billion, a 6% decline year-over-year due to weakened steel prices [3] - Net income fell to $345 million, a 22% decrease, while adjusted EBITDA dropped to $720 million [3] - Free cash flow decreased to $210 million, reflecting lower prices and increased input costs [3] Growth Analysis - Cleveland-Cliffs has experienced declining growth, with revenues decreasing at an average annual rate of 7.9% over the last three years, compared to 5.3% for the S&P 500 [4] - Sales fell by 12% in the past twelve months, from $21 billion to $18 billion, with a recent quarterly revenue decline of 3.1% year-over-year to $4.9 billion [4] Profitability Metrics - The company incurred $1.6 billion in operating losses over the past year, with an operating margin of -8.6% and a net income margin of -9% [5] - Cleveland's operating, cash flow, and net margins are significantly lower than the S&P 500 averages of 18.8%, 20.2%, and 12.8% respectively [5] Financial Stability - Cleveland-Cliffs has a high debt-to-equity ratio of 145.1%, compared to the S&P 500 average of 20.2% [7] - Cash constitutes only 0.3% of total assets, indicating limited flexibility to invest and navigate uncertainties [7] Investment Appeal - The combination of weak growth, limited financial stability, and low profitability makes Cleveland-Cliffs unappealing to investors, despite its low valuation [8]