Cleveland-Cliffs stock has delivered a steep loss of about 48.1% over the past five years, yet current valuation checks and the intrinsic value estimate using a Discounted Cash Flow (DCF) approach both point to shares trading at a discount to what the business may be worth. That disconnect between a weak long term share price record and an apparently cheap valuation is what investors now need to weigh.

• The roughly 48.1% decline over five years means long term holders have seen significant value erode, even as the current share price screens as inexpensive.
• Future cash flow from Cleveland-Cliffs may be supported if the company can sustain solid steel demand and capital discipline. However, any pressure on margins or large funding needs could quickly reduce the appeal of the current discount.
• The stock is assessed as undervalued in 5 of 6 checks, so the broader valuation framework leans cheap rather than suggesting Cleveland-Cliffs is fully priced. You can see this in more detail in the valuation summary.

The issue now is whether the current discount to intrinsic value gives Cleveland-Cliffs enough margin of safety after such a difficult five year run.

Is Cleveland-Cliffs Still Cheap on Cash Flow?

The Discounted Cash Flow model values Cleveland-Cliffs by projecting future cash that can flow to shareholders and discounting it back to today. For Cleveland-Cliffs, the latest twelve month free cash flow is a loss of about $870.1 million, so the model leans heavily on a recovery path that moves from recent pressure on cash generation to positive free cash flow in future years.

Based on those assumptions, the model arrives at an estimated intrinsic value of about $20.72 per share. That implies the stock trades at a 40.6% discount to this estimate. In this framework, the current price remains below what the discounted cash flow suggests for Cleveland-Cliffs, even after factoring in a period of weaker cash flow.

On this Discounted Cash Flow view, Cleveland-Cliffs stock currently screens as undervalued.

Our Discounted Cash Flow (DCF) analysis suggests Cleveland-Cliffs is undervalued by 40.6%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

Does Cleveland-Cliffs Look Undervalued on Sales?

The P/S ratio works well for Cleveland-Cliffs because revenue is a key driver for a steel and mining group where earnings can swing around the cycle. Cleveland-Cliffs currently trades on a P/S of about 0.4x, compared with an industry average of about 3.5x and a peer average of about 1.8x for the Metals and Mining group.

The fair P/S ratio for Cleveland-Cliffs based on its profile is estimated at about 0.9x. That is more than double the current multiple and indicates a wide gap between what investors are paying for each dollar of sales and what this framework suggests might be reasonable. Combined with the DCF work that also points to a discount, the low P/S ratio is another piece of evidence that the stock is priced cautiously relative to its revenue base.

On the P/S yardstick, Cleveland-Cliffs stock appears undervalued compared with both its fair multiple and sector benchmarks.

The Cleveland-Cliffs Narrative: What Would Justify Today's Price?

Simply Wall St Narratives pick up where Cleveland-Cliffs' valuation puzzle leaves off and spell out what would need to happen with its growth, margins and earnings for the stock to be worth materially more or less than today's price, based on scenarios you can track over time on the Community page. Each narrative links a fair value estimate to a specific mix of potential catalysts and risks so you can see which story is gradually playing out.

The community is split on Cleveland-Cliffs, with one camp leaning into tariff support and vertical integration while the other worries about debt, technology and policy risk.

Bull case: 15% undervalued

"Cleveland-Cliffs is poised to benefit disproportionately from the accelerating reshoring of U.S. manufacturing and infrastructure renewal, with multi-year government investments and new trade rules set to create sustained, elevated demand across key value-added steel segments…"

Bear case: 6% overvalued

"Cleveland-Cliffs' long-term competitiveness and cost structure remain heavily dependent on the continued enforcement of Section 232 steel tariffs. Any softening, exemptions, or eventual removal of these protectionist trade measures could re-expose the company to global overcapacity and price competition, negatively impacting revenue and net margins…"

Do you think there's more to the story for Cleveland-Cliffs? Head over to our Community to see what others are saying!

The Bottom Line

Cleveland-Cliffs still screens as undervalued, with the Discounted Cash Flow (DCF) intrinsic value estimate and the sales based multiple both pointing to a discount. The broader valuation checks lean supportive, which means the gap now largely reflects investor caution rather than an obviously stretched price. From here, the key question is whether Cleveland-Cliffs can sustain cash generation and protect margins enough for that discount to close, or whether ongoing concerns about policy support and capital needs keep the stock in value trap territory.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.