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American Resources Corp (AREC)
:AREC
US Market

American Resources (AREC) AI Stock Analysis

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American Resources

(NASDAQ:AREC)

Rating:45Neutral
Price Target:
$1.00
▲(14.94%Upside)
The overall stock score is heavily influenced by American Resources' poor financial performance, which is the most significant factor. Technical analysis provides some neutral insights, while valuation concerns further weigh down the score, reflecting substantial financial and operational risks.

American Resources (AREC) vs. SPDR S&P 500 ETF (SPY)

American Resources Business Overview & Revenue Model

Company DescriptionAmerican Resources Corporation engages in the extraction, processing, transportation, distribution, and sale of metallurgical coal to the steel industries. The company supplies raw materials; and sells coal used in pulverized coal injections. It has a portfolio of operations located in the Pike, Knott, and Letcher Counties in Kentucky; and Wyoming County, West Virginia. American Resources Corporation was founded in 2006 and is headquartered in Fishers, Indiana.
How the Company Makes MoneyAmerican Resources Corporation generates revenue through the extraction and sale of coal, rare earth elements, and other critical minerals. The company's revenue streams are derived mainly from contracts and agreements with industrial clients who require these materials for manufacturing and energy production. Additionally, AREC has strategic partnerships with technology and manufacturing companies that depend on their raw materials for production processes, contributing to the company's earnings. AREC's focus on sustainable practices and diversification of its product offerings also plays a significant role in enhancing its revenue potential.

American Resources Earnings Call Summary

Earnings Call Date:May 19, 2025
(Q3-2024)
|
% Change Since: -6.45%|
Next Earnings Date:Aug 18, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mix of optimism about future growth and expansion plans, particularly in ReElement Technologies and American Infrastructure. However, there are significant challenges regarding stock performance and delays in strategic initiatives. The company's commitment to innovation and partnerships is promising, but execution remains crucial.
Q3-2024 Updates
Positive Updates
Progress in ReElement Technologies
ReElement Technologies is making significant progress, with developments in rare earth element separation and purification. The company is poised to become a major producer of lithium carbonate equivalent in the United States.
Expansion of American Infrastructure Corporation
The company has consolidated valuable assets in its metallurgical carbon and iron ore production, focusing on high-value, high-margin products.
Partnerships and Innovations
American Metals has partnered with India's leading battery recycling company to preprocess batteries, creating materials for ReElement Technologies. This reflects a strong push towards environmental consciousness and innovation.
Strategic Growth Plans
The company is working with large investment banks for a bond offering to scale its Marion facility, indicating robust financial planning for future growth.
Negative Updates
Challenges with Stock Price and Shareholder Value
There is ongoing frustration over declining stock prices and the need to reflect fundamental value in the market, indicating challenges in investor confidence.
Delays in Spinoffs and Listings
Delays in the spin-off process for ReElement Technologies and other entities due to audit issues and strategic decisions, affecting timelines for expected growth.
Dependency on Future Developments
The company's future success hinges on the development and execution of various projects, such as the Marion facility and mining operations, which are yet to be fully realized.
Company Guidance
During the third quarter 2024 earnings call for American Resources Corporation, several key metrics and strategic updates were highlighted. The company reported approximately $150,000 in revenue from ReElement Technologies, emphasizing a focus on growth in the lithium and rare earth elements sectors. The Noblesville facility is currently producing while preparing for expanded operations at Marion, Indiana, which will increase production capacity. The company anticipates substantial revenue growth in 2025 as it scales operations, particularly with the Marion facility expected to become a major producer of separated and purified rare earth oxides and lithium carbonate equivalent. Management also reiterated their commitment to non-dilutive financing strategies, including convertible debt and bond offerings, to support expansion without excessive shareholder dilution. The upcoming spinoff of ReElement as a standalone company, with a record date set for December 2024, is intended to unlock shareholder value.

American Resources Financial Statement Overview

Summary
American Resources is facing significant financial challenges, with consistent negative gross and net profit margins, high leverage, and severe liquidity issues. The company's financial instability is compounded by declining revenues and poor cash flow generation, indicating a need for urgent financial restructuring.
Income Statement
20
Very Negative
American Resources has shown significant challenges in its income statement over the TTM (Trailing-Twelve-Months) period. The company experienced consistent negative gross and net profit margins, indicating substantial losses relative to revenue. Additionally, there is a declining revenue trend, with TTM revenues falling significantly from previous periods. EBIT and EBITDA margins are also deeply negative, reflecting ongoing operational inefficiencies and cost management issues.
Balance Sheet
15
Very Negative
The balance sheet reveals a highly leveraged position with a negative stockholders' equity, indicating potential insolvency risks. The debt-to-equity ratio is unfavorable, suggesting the company is heavily reliant on debt financing. The equity ratio is negative, emphasizing a concerning financial structure with liabilities exceeding assets, which poses significant stability and risk concerns.
Cash Flow
18
Very Negative
The cash flow statement highlights severe liquidity challenges, with negative operating cash flow and free cash flow indicating cash outflows from core operations. The company is struggling to generate cash to sustain its operations, which is compounded by negative free cash flow growth. The ratios of operating and free cash flow to net income are concerning, further reflecting poor cash generation relative to reported losses.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue321.14K383.23K16.74M39.47M7.76M1.06M
Gross Profit-1.46M-2.18M2.48M14.00M-639.79K-4.05M
EBITDA-26.04M-27.07M-7.21M4.72M-24.01M-2.02M
Net Income-40.76M-40.11M-11.46M22.53M-36.33M-16.13M
Balance Sheet
Total Assets202.76M205.01M91.75M55.92M42.87M38.42M
Cash, Cash Equivalents and Short-Term Investments24.62K1.19M2.67M8.87M11.49M10.62M
Total Debt221.62M220.51M57.83M23.49M15.72M30.63M
Total Liabilities289.26M286.92M91.52M55.63M45.11M58.42M
Stockholders Equity-84.94M-80.35M223.84K284.70K-2.24M-20.01M
Cash Flow
Free Cash Flow-16.32M-23.28M-14.52M6.07M-32.16M-13.85M
Operating Cash Flow-15.53M-22.23M-14.52M6.07M-29.09M-13.85M
Investing Cash Flow1.23M55.98K-28.83M-7.64M-5.92M417.86K
Financing Cash Flow-1.52M146.66M37.39M-31.61K36.40M24.36M

American Resources Technical Analysis

Technical Analysis Sentiment
Positive
Last Price0.87
Price Trends
50DMA
0.84
Positive
100DMA
0.71
Positive
200DMA
0.83
Positive
Market Momentum
MACD
0.01
Positive
RSI
53.12
Neutral
STOCH
27.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AREC, the sentiment is Positive. The current price of 0.87 is above the 20-day moving average (MA) of 0.84, above the 50-day MA of 0.84, and above the 200-day MA of 0.83, indicating a bullish trend. The MACD of 0.01 indicates Positive momentum. The RSI at 53.12 is Neutral, neither overbought nor oversold. The STOCH value of 27.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AREC.

American Resources Risk Analysis

American Resources disclosed 29 risk factors in its most recent earnings report. American Resources reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

American Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
NCNC
75
Outperform
$315.71M9.188.62%2.38%14.70%
SXSXC
72
Outperform
$738.16M7.9914.26%5.50%-8.76%51.59%
NRNRP
71
Outperform
$1.28B9.3731.98%3.08%-19.21%-30.92%
71
Outperform
$615.57M43.10-0.08%2.30%-10.23%-100.04%
53
Neutral
$696.21M-107.44%-27.04%-892.84%
45
Neutral
$71.64M63.45%-95.97%-173.75%
44
Neutral
C$979.74M-6.70-13.35%2.68%17.20%-32.62%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AREC
American Resources
0.87
0.24
38.10%
HNRG
Hallador Energy Company
16.20
8.81
119.22%
NC
NACCO Industries
42.42
15.19
55.78%
NRP
Natural Resource PRN
97.51
6.93
7.65%
SXC
Suncoke Energy
8.72
-0.71
-7.53%
METC
Ramaco Resources
11.94
-1.35
-10.16%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025