Value
7.0/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 10.0 |
| EV/EBITDA | 2.6 |
| Fwd P/E | 9.4 |
| PEG | 10.0 |
| Analyst target | 3.0 |
- ▸Forward P/E: 9.5x
- ▸PEG: 0.03
- ▸Attractively valued
CLF · Why this verdict
Why Cleveland-Cliffs (CLF) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Three consecutive earnings beats averaging roughly 15% above estimates demonstrate improving operational discipline, but the stock already trades well above analyst consensus and free cash flow remains negative, making the risk/reward unfavorable for new buyers at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock currently trades above analyst consensus, leaving implied downside of roughly 26% to the consensus target — meaning the market has already priced in outcomes more optimistic than the analyst community's median case. Bear case | For this concern to resolve, analyst targets would need to be revised above the current stock price of $13.63, or the price would need to pull back to consensus levels. | Tripped↓Deteriorating |
| CounterAnalyst targets can lag rapidly improving fundamentals; if the earnings beat streak continues, upward target revisions may close the gap between current price and consensus. | ||
Three of the past four quarters have come in above consensus estimates, with an average positive surprise of roughly 15%, followed by an in-line result in the earliest of the four periods — a track record suggesting management is consistently under-promising and over-delivering. Earnings | Beat streak extends to at least four of the next five quarters, with the average EPS surprise remaining above 10% over the trailing four periods. | →Stable |
| CounterEarnings beats in cyclical materials names often coincide with a favorable underlying pricing window; if conditions weaken, the outperformance streak may reverse without any change in operational execution. | ||
Free cash flow is negative as a fraction of revenue and the business lacks a recognizable competitive moat, placing quality below the minimum threshold for a defensible long position. Quality | If fundamentals are genuinely improving, free cash flow turns positive on a trailing-twelve-month basis within the next four quarters. | Tripped→Stable |
| CounterCyclical materials businesses routinely show negative near-term free cash flow during periods of maintenance and investment; the lack of a formal moat classification does not necessarily mean the business has no competitive advantages from customer relationships or scale. | ||
Short interest stands at 15% of the float — a level that reflects meaningful conviction among those positioned against the stock and introduces asymmetric downside pressure if sentiment turns more negative. Key risks | If the bull case is materializing, short interest should decline toward 8% or below as short-sellers cover over the next 6–12 months. | ↓Deteriorating |
| CounterHigh short interest in cyclical materials stocks sometimes reflects hedging activity by sector-specific funds rather than fundamental conviction, and an unexpected positive catalyst could trigger a short squeeze that temporarily amplifies any upside move. | ||
The stock currently trades above analyst consensus, leaving implied downside of roughly 26% to the consensus target — meaning the market has already priced in outcomes more optimistic than the analyst community's median case.
Tripped↓DeterioratingBear case
- Expectation
- For this concern to resolve, analyst targets would need to be revised above the current stock price of $13.63, or the price would need to pull back to consensus levels.
CounterAnalyst targets can lag rapidly improving fundamentals; if the earnings beat streak continues, upward target revisions may close the gap between current price and consensus.
Three of the past four quarters have come in above consensus estimates, with an average positive surprise of roughly 15%, followed by an in-line result in the earliest of the four periods — a track record suggesting management is consistently under-promising and over-delivering.
→StableEarnings
- Expectation
- Beat streak extends to at least four of the next five quarters, with the average EPS surprise remaining above 10% over the trailing four periods.
CounterEarnings beats in cyclical materials names often coincide with a favorable underlying pricing window; if conditions weaken, the outperformance streak may reverse without any change in operational execution.
Free cash flow is negative as a fraction of revenue and the business lacks a recognizable competitive moat, placing quality below the minimum threshold for a defensible long position.
Tripped→StableQuality
- Expectation
- If fundamentals are genuinely improving, free cash flow turns positive on a trailing-twelve-month basis within the next four quarters.
CounterCyclical materials businesses routinely show negative near-term free cash flow during periods of maintenance and investment; the lack of a formal moat classification does not necessarily mean the business has no competitive advantages from customer relationships or scale.
Short interest stands at 15% of the float — a level that reflects meaningful conviction among those positioned against the stock and introduces asymmetric downside pressure if sentiment turns more negative.
↓DeterioratingKey risks
- Expectation
- If the bull case is materializing, short interest should decline toward 8% or below as short-sellers cover over the next 6–12 months.
CounterHigh short interest in cyclical materials stocks sometimes reflects hedging activity by sector-specific funds rather than fundamental conviction, and an unexpected positive catalyst could trigger a short squeeze that temporarily amplifies any upside move.
Per-dimension breakdown
Quality
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 2.7 |
| Net margin | 0.0 |
| Current ratio | 6.6 |
| Moat | 4.2 |
| Piotroski F | 5.6 |
- ▸No competitive moat
- ▸Quality concerns
Growth
8.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.1 |
| EPS growth | 10.0 |
Momentum
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.5 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 1.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 5.1 |
Insider
5.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.4 |
| notable moves | 5.0 |
- ▸Negligible insider buying — $99,826 (0.001% of mkt cap)
Peer rank
3.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.7 |
| quality rank | 1.1 |
| growth rank | 5.7 |
Technical
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 1.9 |
| support resistance | 1.7 |
| 52w position | 6.7 |
Risk (lower is worse)
3.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.3 |
| days to cover | 6.2 |
| volatility | 0.0 |
| put call | 8.7 |
| implied vol | 0.0 |
| beta | 3.0 |
| debt equity | 4.4 |
| news risk | 3.0 |
- ▸High IV: 81%
Catalyst
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (8)
- MOMENTUM:6.5>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.60
- NEWS_BOOST:ANALYST_CLUSTER(3)
- EARNINGS_PROXIMITY:101d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.8=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.82
Upside
-12.3%
Downside
15.0%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 62, MACD bullish
EdgeSector Rotation — Basic Materials sector out of favor, value=7.0
SuitabilityAggressive — Beta 2.09>1.3
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's -0.8=NEGATIVE outcome against Growth at 8.6 and asymmetric R:R of -0.82.
The strongest dimensions are Growth at 8.6, Catalyst at 7.9, and Value at 7.0; the weakest are Quality at 2.4, Technical at 3.4, and Risk (lower is worse) at 3.6. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Consistent Earnings Outperformance
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Price Exceeds Analyst ConsensusTripped
Trip ifAnalyst consensus price target is revised above $13.63 (the current stock price), restoring positive implied upside for new buyers.
- P3Negative Cash Flow No MoatTripped
Trip ifFree cash flow rises above $0 on a trailing-twelve-month basis.
- P4Elevated Short Interest Headwind
Trip ifShort interest falls below 8% of the float.