Overview CF Industries is a global nitrogen fertilizer producer with a capital‑intensive, cyclical revenue profile that has delivered very high profitability and strong cash generation in recent years. Strong Landscape and Financial Highlights The company shows several clear strengths: trailing return on equity expanded to 77.9% (most recent TTM) and gross margin has been robust, reaching 50.3% in
CF Industries is a global nitrogen fertilizer producer with a capital‑intensive, cyclical revenue profile that has delivered very high profitability and strong cash generation in recent years.
The company shows several clear strengths: trailing return on equity expanded to 77.9% (most recent TTM) and gross margin has been robust, reaching 50.3% in the 2026‑03‑31 quarter, while operating margin is also strong at 33.3%, underscoring outsized profitability on recent volumes and prices (Profit Margin Trends; Return on Equity (ROE)). Operating cash flow (TTM) increased materially from $1.50B in 2019 to $3.85B by 2022‑12‑31, supporting larger financing and investing activity and reflecting substantial free‑cash generation at peak margins (Strategic Capital Allocation).
Material weaknesses and volatility are evident. Diluted EPS has been uneven, with a one‑year decline of about -33.1% on the last comparable reading and the most recent reported EPS of $35.05 far below the mid‑2023 peak of $101.23, signaling earnings volatility even as revenue per share recovered to $176.80 in 2026‑03‑31 (EPS Diluted & Revenue per Share; Revenue & EPS Growth). Revenue and net income have also swung quarter‑to‑quarter — revenues moved from $3.54B in 2025‑12‑31 to $1.99B in 2026‑03‑31 and TTM net income fell from a peak above $5.19B in mid‑2023 to $1.80B most recently — pointing to sensitivity to pricing and demand dynamics (Revenue & Net Income).
Key fundamental metrics to monitor going forward are quarterly revenue per share and diluted EPS trends and their convergence, gross and net margin trajectories, operating cash flow levels versus net income to assess earnings quality, and changes in investing and financing cash flow (capex and dividends/repurchases) as well as leverage and interest coverage; relevant comparisons can be found on the EPS Diluted & Revenue per Share, Revenue & EPS Growth, Profit Margin Trends, Earnings Quality Analysis, Strategic Capital Allocation, and Price-to-Earnings (PE) Ratio Trend.
The foundation of business quality and long-term value creation
CF Industries Holdings, Inc. demonstrates an uneven revenue profile with material quarter-to-quarter swings. Over the past several years, revenue has ranged from under $500M in earlier periods to peaks above $3.9B. Recent quarters reported revenues of $1.89B (2025-06-30), $1.66B (2025-09-30), then a sharp increase to $3.54B (2025-12-31), followed by a decline to $1.99B in the most recent quarter (2026-03-31). Notable inflection points include the high revenues in late 2021 and mid-2022, such as $3.90B on 2021-12-31 and $3.39B on 2022-06-30, as well as the pronounced Q4 2025 revenue spike to $3.54B.
Net income for CF Industries Holdings, Inc. has also been volatile. The largest recent net income was $3.40B (2022-12-31). More typical recent quarterly results were in the hundreds of millions through 2023–2024, with $238.0M reported on 2024-03-31. The most recent reported net income is $1.80B for the quarter ended 2025-12-31. The most recent quarterly revenue was $1.99B (period ended 2026-03-31), and the most recent reported net income was $1.80B (period ended 2025-12-31).
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Apr 2025 to Mar 2026
Analyzing long-term margin stability and competitive positioning
CF Industries Holdings, Inc.'s gross margin shows material variability over the period: a low-20s trough across 2019–2020, a sustained rise into 2021–2022 with a peak at 52.4% (2022-12-31), a decline to 38.5% at 2025-12-31, and a recent rebound to 50.3% in the quarter ending 2026-03-31. The most notable inflection points are the sharp improvement from ~19–25% in 2019–2020 to the 50%+ range by 2022, the pullback through 2025, and the strong one-quarter recovery in Q1 2026.
Operating and net margins likewise improved from 2020 levels: operating margin rose from 15.1% (2020-12-31) to 33.3% by 2025-12-31, while net profit margin peaked at 35.2% (2022-12-31) before declining to 25.4% at 2025-12-31. The most recent observed values are: Gross Margin 50.3% (2026-03-31), Operating Margin 33.3% (2025-12-31), and Net Profit Margin 25.4% (2025-12-31).
Understanding Profit Margins
Between Apr 2025 and Mar 2026, Cf Industries Holdings Inc converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
CF Industries Holdings, Inc.'s trailing‑12‑month net income rose from $3.94B at year‑end 2022 to a peak of $5.19B in the TTM ending 2023‑06‑30 (and $4.88B at 2023‑09‑30), then declined to $1.80B in the TTM ending 2025‑12‑31. Operating cash flow (TTM) shows a high point of $3.85B at 2022‑12‑31 and earlier lower levels (for example $1.50B in 2019 and $2.87B in 2021), with no later operating cash flow datapoint provided after 2022‑12‑31.
Across the most recent observations, net income and operating cash flow were closely aligned around year‑end 2022 (net income $3.94B vs operating cash flow $3.85B), then net income exceeded the last reported operating cash flow during the 2023 peak before falling below that operating cash flow level by 2025. The most recent Net Income (TTM) was $1.80B. The most recent Operating Cash Flow (TTM) was $3.85B.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
CF Industries Holdings, Inc.'s reported trailing twelve-month Return on Equity has varied materially across the sampled periods, with low single-digit readings in 2010 (4.5%) and 2020 (3.7%), a mid-teens value in 2015 (18.2%), and a pronounced increase in the most recent period. The most recent observation for the period ending 2022-12-31 shows a marked escalation relative to prior years.
Most recent trailing twelve-month ROE for CF Industries Holdings, Inc.: 77.9%
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
CF Industries Holdings, Inc. shows a multi-year increase in operating cash generation through the data provided, rising from $1.50B TTM in 2019 to $2.87B TTM in 2021 and peaking at $3.85B TTM as of 2022-12-31. Over the same span, financing cash flows moved markedly more negative, with financing outflows around -$1.58B TTM in 2019 and increasing to -$2.70B TTM at 2022-12-31 and -$2.77B TTM at 2023-03-31. Investing cash outflows have also enlarged in recent quarters, shifting from roughly -$319M TTM in 2019 to -$469M TTM at 2024-12-31 and accelerating to -$933M TTM at 2025-12-31 and -$1.03B TTM at 2026-03-31.
The most recent trailing twelve-month values observed were: Operating Cash Flow (TTM) $3.85B (as of 2022-12-31), Investing Cash Flow (TTM) -$1.03B (as of 2026-03-31), and Financing Cash Flow (TTM) -$2.77B (as of 2023-03-31).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
CF Industries Holdings, Inc.'s reported trailing twelve-month price-to-earnings ratio declined from 1.1x at 2022 year-end to a low of 0.7x in Q2 2023, then rose to 0.9x in Q3 2023 and moved higher to 2.2x by the 2025-12-31 reporting period. The most recent quarters show a clear increase from the mid-2023 trough through the latest available period.
Historical readings in the dataset include higher P/E levels earlier in the decade — 4.6x at 2020-12-31, 4.0x at 2010-12-31, 3.8x at 2019-12-31 and 2.9x at 2015-12-31 — indicating the 2.2x level is below those earlier peaks. The most recent Price-to-Earnings ratio was 2.2x as of 2025-12-31.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.