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Alliance Resource Partners L.P. (ARLP)
NASDAQ:ARLP
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Alliance Resource
(NASDAQ:ARLP)
Rating:80Outperform
Price Target:
$30.00
â–²( 13.98% Upside)
Positive Factors
Contracting Success
The company successfully contracted 17.7 million tons for 2025-2028 and is now 96% committed for 2025 even after increasing sales guidance.
Market Conditions
Domestic market conditions remain favorable due to factors like higher natural gas prices and increased electricity demand forecasts.
Stock Potential
The price target for Alliance Resource Partners LP has been raised from $27.00 to $29.00, showing an expected increase in stock value.
Negative Factors
Appalachia Segment Challenges
The Appalachia segment faced challenges with higher-than-expected expenses and lower recoveries, affecting overall results.
Quarterly Performance
4Q results for Alliance Resource Partners LP were below expectations.
Unfavorable Mining Conditions
Results were again negatively impacted by unfavorable mining conditions at Tunnel Ridge which pressured sales and cost/ton.
Alliance Resource (ARLP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.38B
Dividend Yield10.64%
Average Volume (3M)368.43K
Price to Earnings (P/E)12.4
Beta (1Y)0.30
Revenue Growth-8.53%
EPS Growth-53.44%
CountryUS
Employees3,653
SectorEnergy
Sector Strength46
IndustryCoal
Share Statistics
EPS (TTM)0.57
Shares Outstanding128,428,020
10 Day Avg. Volume319,567
30 Day Avg. Volume368,434
Financial Highlights & Ratios
PEG Ratio<0.01
Price to Book (P/B)<0.01
Price to Sales (P/S)0.00
P/FCF Ratio0.05
Enterprise Value/Market Cap-12.12
Enterprise Value/Revenue-4.19
Enterprise Value/Gross Profit-42.40
Enterprise Value/Ebitda-14.18
Forecast
1Y Price Target
$30.00Price Target Upside13.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Alliance Resource Business Overview & Revenue Model
Company DescriptionAlliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties. It produces a range of thermal and metallurgical coal with sulfur and heat contents. The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas producing regions primarily in the Permian, Anadarko, and Williston Basins. Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software. As of December 31, 2021, it had approximately 547.1 million tons of proven and probable coal mineral reserves, as well as 1.17 billion tons of measured, indicated, and inferred coal mineral resources in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.
How the Company Makes MoneyAlliance Resource Partners generates revenue primarily through the mining, production, and sale of coal. The company supplies coal to major electric utilities and industrial users, with long-term supply contracts ensuring steady income streams. Additionally, ARLP benefits from its investments in oil and gas mineral interests, which provide supplemental income. The company strategically manages its operations to optimize production efficiency and cost-effectiveness, enhancing profitability. Key partnerships with utility companies and industrial clients, along with its extensive transportation infrastructure, contribute significantly to ARLP's earnings by ensuring consistent demand and efficient distribution of its coal products.
Alliance Resource Financial Statement Overview
Summary
Alliance Resource is performing well across all financial metrics, showcasing strong profitability, financial stability, and healthy cash flows. The company has managed to sustain growth in an industry that can be volatile, with particular strengths in its profit margins and equity management. While the balance sheet is strong, careful management of liabilities and maintaining consistent cash flow conversion will be important for continued success.Income Statement
Alliance Resource demonstrates strong profitability with a high Gross Profit Margin of 99.83% and a solid Net Profit Margin of 13.68% for the TTM. The company has experienced consistent revenue growth, notably a significant increase from 2021 to 2024. However, the EBIT Margin has fluctuated, indicating some volatility in operational efficiency.85
Very Positive
Balance Sheet
The company's Balance Sheet is robust, characterized by a high Equity Ratio of 71.63% and manageable Debt-to-Equity Ratio of 0.02. This indicates financial stability and a low risk of over-leverage. The Return on Equity is strong at 3.57%, reflecting efficient use of equity to generate profits. However, the presence of significant total liabilities requires monitoring.78
Positive
Cash Flow
Alliance Resource shows healthy cash flows with a strong Operating Cash Flow to Net Income Ratio of 1.97 for TTM, indicating effective cash generation. The Free Cash Flow has grown consistently, though the Free Cash Flow to Net Income Ratio of 0.80 suggests potential room for improvement in converting income to free cash.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.34B | 2.45B | 2.57B | 2.41B | 1.57B | 1.33B | Gross Profit |
| 965.88M | 2.45B | 751.49M | 1.01B | 289.36M | 133.96M | EBIT |
| 328.11M | 394.13M | 672.40M | 1.21B | -42.98M | -239.79M | EBITDA |
| 584.13M | 627.01M | 948.52M | 934.16M | 483.47M | 234.02M | Net Income Common Stockholders |
| 276.78M | 360.86M | 630.12M | 586.20M | 182.77M | -129.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 133.96M | 136.96M | 59.81M | 296.02M | 122.40M | 55.57M | Total Assets |
| 2.97B | 2.92B | 2.79B | 1.05B | 2.16B | 2.17B | Total Debt |
| 444.73M | 486.80M | 350.82M | 434.31M | 450.66M | 609.78M | Net Debt |
| 310.77M | 349.84M | 291.01M | 138.28M | 328.25M | 554.20M | Total Liabilities |
| 1.04B | 1.06B | 929.83M | 1.02B | 933.34M | 1.09B | Stockholders Equity |
| 1.90B | 2.09B | 1.83B | 1.61B | 1.21B | 1.06B |
| Cash Flow | Free Cash Flow | ||||
| 59.19B | 374.39M | 451.30M | 505.42M | 302.22M | 279.54M | Operating Cash Flow |
| 146.28B | 803.13M | 830.64M | 791.81M | 425.20M | 400.64M | Investing Cash Flow |
| -93.37B | -440.66M | -559.73M | -403.34M | -142.69M | -125.12M | Financing Cash Flow |
| -108.58B | -285.32M | -507.12M | -214.85M | -215.69M | -256.43M |
Alliance Resource Technical Analysis
Positive
26.32
Price Trends
25.93
Positive
25.84
Positive
24.70
Positive
Market Momentum
0.17
Negative
51.67
Neutral
75.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLP, the sentiment is Positive. The current price of 26.32 is above the 20-day moving average (MA) of 26.22, above the 50-day MA of 25.93, and above the 200-day MA of 24.70, indicating a bullish trend. The MACD of 0.17 indicates Negative momentum. The RSI at 51.67 is Neutral, neither overbought nor oversold. The STOCH value of 75.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARLP.
Alliance Resource Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.69B | 5.21 | 10.33% | 2.16% | -7.42% | -26.06% | |
80 Outperform | $3.38B | 12.36 | 14.71% | 10.64% | -8.53% | -53.44% | |
69 Neutral | $3.69B | 14.44 | 4.36% | 0.86% | 10.42% | -70.77% | |
68 Neutral | $1.27B | 9.27 | 31.98% | 3.11% | -19.21% | -30.92% | |
61 Neutral | $1.51B | 57.45 | 1.66% | 0.36% | -23.34% | -95.18% | |
59 Neutral | $2.38B | 22.50 | 5.20% | 0.71% | -21.04% | -75.78% | |
57 Neutral | $7.06B | 3.07 | -3.48% | 5.79% | 0.59% | -50.58% |
* Energy Sector Average
Performance Comparison
ARLP
Alliance Resource
26.32
4.79
22.25%
NRP
Natural Resource PRN
96.46
10.12
11.72%
AMR
Alpha Metallurgical Resources
115.96
-193.77
-62.56%
HCC
Warrior Met Coal
45.29
-20.66
-31.33%
BTU
Peabody Energy Comm
13.91
-9.40
-40.33%
CNR
Core Natural Resources
69.99
-27.45
-28.17%
Alliance Resource Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: -0.45%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with strong domestic coal demand and significant long-term contracts, but it also highlighted decreased revenues, net income, and coal sales volumes. Challenges in export markets and Appalachian mining conditions further clouded the outlook.Q1-2025 Updates
Positive Updates
Strong Domestic Coal Demand
Increased coal consumption due to cold winter weather and higher natural gas prices led to reduced customer inventories and increased solicitations for both near-term and long-term supply contracts.
Increased Illinois Basin Sales Expectations
Illinois Basin sales tons expectations increased by 500,000 tons for the 2025 full year due to heightened domestic customer solicitations.
Significant Long-term Contracts
Secured commitments for an additional 17.7 million tons over the 2025 to 2028 time period, with 96% of 2025 production contracted and priced.
Positive Market Developments
Recent executive orders by President Trump to expand coal-fired generation and protect grid reliability create a more favorable regulatory environment for coal.
Improved Segment Adjusted EBITDA Expense
Segment adjusted EBITDA expense per ton in the Illinois Basin decreased 4% year-over-year due to increased production and lower maintenance costs.
Negative Updates
Decline in Total Revenues
Total revenues for Q1 2025 were $540.5 million, down from $651.7 million in Q1 2024, primarily due to reduced coal sales volumes and prices.
Decrease in Net Income
Net income for Q1 2025 was $74 million, down from $158.1 million in Q1 2024, reflecting lower coal sales volumes and realized prices.
Decreased Coal Sales Volumes
Total coal production in Q1 2025 was 8.5 million tons, a decrease of 7.2% year-over-year, with coal sales volumes down by 10.4% to 7.8 million tons.
Challenges in Export Markets
Export opportunities for high sulfur coal out of the Illinois Basin were not as attractive, with guidance assuming no new export contracts for 2025.
Appalachian Mining Challenges
Coal sales volumes in Appalachia were down 22.7% year-over-year due to challenging mining conditions, leading to higher costs and lower recoveries.
Company Guidance
During the first quarter 2025 earnings call, Alliance Resource Partners provided updated guidance for the year, reflecting various market dynamics and operational strategies. The company anticipates full-year coal sales between 32.75 and 34.75 million tons, with 96% of 2025 sales already contracted. Despite a year-over-year decline in total revenues to $540.5 million, primarily due to reduced coal sales volumes and prices, the company remains optimistic due to increased domestic coal demand driven by cold winter weather and higher natural gas prices. Adjusted EBITDA for the quarter was $159.9 million, while net income stood at $74 million. The company expects segment adjusted EBITDA expense per ton to range from $35 to $38 in the Illinois Basin and $53 to $60 in Appalachia. Capital expenditures for 2025 are projected to be between $285 million and $320 million, significantly reduced from 2024's $429 million. The company maintains a strong liquidity position with $514.3 million at quarter-end, including $81.3 million in cash and 513 Bitcoin valued at $42 million. Alliance also declared a quarterly distribution of $0.70 per unit, unchanged from previous levels.Alliance Resource Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Alliance Resource Expands Board with Strategic Appointment
Positive
Dec 13, 2024
Alliance Resource Partners, L.P. announced the appointment of Ronna R. McDaniel to its Board of Directors, increasing the board size temporarily to seven members until the retirement of John Robinson at the end of 2024. McDaniel, recognized for her leadership and governance skills, will serve on key committees and contribute to the company’s strategic positioning as a reliable energy provider. This move is part of ARLP’s efforts to strengthen its governance and operational strategy as it continues to advance in the energy sector.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.