Cleveland-Cliffs

Cleveland-Cliffs Inc earns a 3-star quantitative star rating, illustrating our stance that this share class is a balanced choice, but prudent investors should consider looking elsewhere. The stock currently trades at a 13% discount to our quantitative fair value estimate of $13.95 per share; however, caution is warranted due to this estimate's high uncertainty rating.

The firm's valuation metrics strengthen our estimated fair value. A company's valuation metrics provide insights into the market's expectations for its future growth and profitability. For example, the firm's book value yield of 86.8% falls in the top 40% globally. The market price is low relative to the book (accounting) value of the company's equity, which contributes to our view that shares are undervalued.

Alternatively, the company's lack of growth is potentially concerning. Stagnant revenue and earnings growth indicates a company's challenges in increasing market share and profitability. The firm's EBIT 3-year growth, for example, sits in the bottom 1% compared with global peers. Earnings before interest and taxes has exhibited poor growth over the last three years. The future could be difficult for the firm, which, despite our favorable price/fair value ratio, is a negative attribute.

This company lacks a competitive advantage, receiving a quantitative economic moat rating of none. Additionally, the firm's moderate financial health score suggests it is acceptably positioned against adverse economic circumstances.