Is CF Industries Holdings, Inc. overvalued or undervalued?

As of 6 August 2025, the valuation grade for CF Industries Holdings, Inc. has moved from fair to very attractive, indicating a strong potential for upside. The company appears undervalued, supported by a P/E ratio of 9, a PEG ratio of 0.42, and an EV to EBITDA ratio of 5.74, all of which suggest that the stock is trading at a discount compared to its earnings growth potential and cash flow generation capabilities.
In comparison to its peers, CF Industries has a lower P/E ratio than The Mosaic Co. at 10.28 and a more favorable EV to EBITDA ratio than both The Mosaic Co. (6.19) and Scotts Miracle-Gro Co. (11.59). Notably, the company has a robust ROCE of 31.21% and ROE of 33.65%, further indicating efficient use of capital. Despite recent underperformance against the S&P 500 over the past year and three years, where CF Industries returned 3.20% and -14.70% respectively compared to 17.14% and 70.41%, its long-term performance over five years shows a significant gain of 147.28%, suggesting potential for recovery and growth.