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Alliance Resource Partners (ARLP)
:ARLP
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Alliance Resource
(NASDAQ:ARLP)
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Rating:72Outperform
Price Target:
$26.00
▲(7.88% Upside)
Alliance Resource's overall stock score is driven by strong financial performance and attractive valuation, particularly its high dividend yield. However, technical indicators suggest bearish momentum, and mixed earnings call results highlight challenges such as declining revenues and net income. The company's strong operational efficiency and cash flow health are significant positives, but the market's current sentiment and recent financial results temper the overall outlook.
Positive Factors
Strong Contracted Position
A high level of committed coal sales ensures predictable revenue streams and reduces market volatility impact, supporting financial stability.
Improved Cost Efficiency
Improved cost efficiency enhances profitability and competitive positioning, allowing the company to better withstand pricing pressures.
Strong Balance Sheet
A strong balance sheet with low leverage provides financial flexibility and resilience, enabling strategic investments and weathering downturns.
Negative Factors
Revenue Decline
Declining revenue indicates potential challenges in maintaining market share or pricing power, which can affect long-term growth prospects.
Lower Coal Sales Prices
Falling coal prices can pressure margins and profitability, impacting the company's ability to invest in growth and innovation.
Challenges in Appalachia
Operational challenges in key regions can hinder production efficiency and output, affecting overall company performance and market competitiveness.
Alliance Resource (ARLP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.12B
Dividend Yield11.1%
Average Volume (3M)409.90K
Price to Earnings (P/E)13.4
Beta (1Y)0.40
Revenue Growth-8.59%
EPS Growth-55.01%
CountryUS
Employees3,653
SectorEnergy
Sector Strength52
IndustryCoal
Share Statistics
EPS (TTM)0.46
Shares Outstanding128,428,020
10 Day Avg. Volume325,876
30 Day Avg. Volume409,902
Financial Highlights & Ratios
PEG Ratio-0.22
Price to Book (P/B)1.84
Price to Sales (P/S)1.37
P/FCF Ratio8.99
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue1.66
Enterprise Value/Gross Profit9.24
Enterprise Value/Ebitda6.41
Forecast
1Y Price Target
$30.50Price Target Upside26.56% 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 generates revenue primarily through the sale of coal, which is its core product. The company operates several mining complexes that produce various grades of coal, catering to both domestic and international markets. Key revenue streams include long-term coal supply agreements with utility companies and industrial customers, which provide stable cash flow. Additionally, ARLP benefits from spot market sales and export opportunities, especially in regions where demand for metallurgical coal is high. The company's profitability is also influenced by coal pricing dynamics, production costs, and demand fluctuations in the energy sector. Strategic partnerships with transportation and logistics companies further enhance its distribution capabilities, ensuring efficient delivery of its products to customers.
Alliance Resource Earnings Call Summary
Earnings Call Date:Jul 28, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were significant achievements in coal sales volumes and cost efficiency, as well as a strong contracted sales position and an optimistic outlook for the coal market, these were offset by declines in revenue and net income, lower coal sales prices, and challenges in the Appalachia mining conditions. The noncash impairment charge further impacted financial results.Q2-2025 Updates
Positive Updates
Increased Coal Sales Volumes
Coal sales volumes increased 6.8% year-over-year to 8.4 million tons and were up 7.9% compared to the sequential quarter. Illinois Basin coal sales volumes increased by 15.2% year-over-year and 10.3% sequentially, led by record shipments from the River View and Hamilton mines.
Improved Cost Efficiency
Segment adjusted EBITDA expense per ton sold for coal operations decreased by 9% year-over-year and 3.5% sequentially, primarily driven by cost reductions in the Illinois Basin.
Strong Contracted Position
For 2025, Alliance is 97% committed on coal sales, with 32.3 million tons committed and priced. For 2026, they are 80% committed and priced, up from 61% last quarter.
Encouraging Outlook for Coal Market
The domestic coal market is showing strong fundamentals, driven by increased electricity demand and supportive regulatory actions. Alliance sees opportunities to grow sales volumes next year.
Oil & Gas Royalties Growth
Oil and gas royalty volumes increased 7.7% year-over-year, leading to a 5% increase in the full-year BOE volume guidance midpoint.
Negative Updates
Decline in Total Revenues and Net Income
Total revenues for Q2 2025 were $547.5 million, down from $593.4 million in Q2 2024. Net income decreased to $59.4 million from $100.2 million in Q2 2024.
Lower Coal Sales Prices
The average coal sales price per ton in Q2 2025 was $57.92, a decrease of 11.3% year-over-year and 3.9% sequentially.
Challenges in Appalachia
Coal sales volumes in Appalachia were down 16.8% year-over-year due to challenging mining conditions at Tunnel Ridge, though improvements are expected in the second half of the year.
Noncash Impairment Charge
A $25 million noncash impairment charge was recorded on a preferred stock investment in a battery materials company.
Company Guidance
In the second quarter of 2025, Alliance Resource Partners reported total revenues of $547.5 million, a decrease from $593.4 million in the same quarter of 2024, primarily due to lower coal sales prices and transportation revenues. However, coal sales volumes increased, contributing to a sequential revenue increase of $7 million. The average coal sales price per ton was $57.92, a decline of 11.3% year-over-year and 3.9% sequentially, influenced by legacy contracts and a revenue mix shift. Coal production was 8.1 million tons, down 3.9% from 2024, while sales volumes rose 6.8% to 8.4 million tons. The Illinois Basin saw significant growth in coal sales volumes, while Appalachia faced challenges. Segment adjusted EBITDA expense per ton sold was $41.27, marking a year-over-year decrease of 9%. The royalty segment's total revenues were $53.1 million, with oil and gas royalty volumes increasing 7.7% year-over-year. Net income for the quarter was $59.4 million, down from $100.2 million in 2024, impacted by higher depreciation and a $25 million impairment on a stock investment. Adjusted EBITDA was $161.9 million, down 10.8% from the previous year. The company ended the quarter with total debt of $477.4 million and liquidity of $499.2 million, including 542 Bitcoin valued at $58 million. Alliance committed 17.4 million tons of coal for 2025 to 2029 and is 97% committed for 2025 coal sales. Guidance for 2025 includes expected full-year coal sales of 32.75 to 34 million tons, with segment adjusted EBITDA expenses forecasted to be $39 to $43 per ton. The company anticipates an improved second half for Appalachia and remains optimistic about domestic market prospects amid a favorable regulatory environment.Alliance Resource Financial Statement Overview
Summary
Alliance Resource demonstrates strong operational efficiency and cash flow health, with robust profitability margins. The balance sheet shows low leverage and a strong equity position, despite minor asset decline. Key challenges include recent revenue contraction and negative free cash flow growth, which may impact future financial resilience.Income Statement
Alliance Resource shows a strong gross profit margin of 17.93% and a net profit margin of 10.30% in the TTM (Trailing-Twelve-Months). EBIT and EBITDA margins are also solid at 14.42% and 25.83%, respectively. However, revenue has declined by 6.42% between the last annual report and the TTM, indicating potential revenue growth challenges.80
Positive
Balance Sheet
The company's debt-to-equity ratio is 0.27, which is relatively low and indicates good leverage management. Return on equity (ROE) stands at 13.16%, showing decent profitability. The equity ratio is strong at 62.50%, reflecting a robust capital structure. However, a slight decrease in total assets compared to the previous year may need monitoring.75
Positive
Cash Flow
Alliance Resource has a strong operating cash flow to net income ratio of 2.86 and a free cash flow to net income ratio of 1.35, indicating excellent cash generation capabilities. The free cash flow growth rate is negative at -15.10% from the last annual report to the TTM, which could suggest capital expenditure pressures.85
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.29B | 2.45B | 2.57B | 2.42B | 1.57B | 1.33B |
| Gross Profit | 411.03M | 507.48M | 751.49M | 741.20M | 289.36M | 133.96M |
| EBITDA | 592.02M | 702.17M | 948.52M | 956.14M | 483.47M | 234.02M |
| Net Income | 236.00M | 360.86M | 630.12M | 586.20M | 182.77M | -129.05M |
Balance Sheet | ||||||
| Total Assets | 2.87B | 2.92B | 2.79B | 2.73B | 2.16B | 2.17B |
| Cash, Cash Equivalents and Short-Term Investments | 55.00M | 136.96M | 59.81M | 296.02M | 122.40M | 55.57M |
| Total Debt | 476.10M | 486.80M | 350.82M | 434.31M | 450.66M | 609.78M |
| Total Liabilities | 1.06B | 1.06B | 929.83M | 1.02B | 933.34M | 1.09B |
| Stockholders Equity | 1.79B | 1.83B | 1.83B | 1.61B | 1.21B | 1.06B |
Cash Flow | ||||||
| Free Cash Flow | 317.82M | 374.39M | 362.08M | 515.96M | 272.20M | 280.53M |
| Operating Cash Flow | 675.07M | 803.13M | 830.64M | 802.35M | 426.14M | 401.63M |
| Investing Cash Flow | -385.92M | -440.66M | -559.73M | -403.34M | -143.63M | -126.11M |
| Financing Cash Flow | -437.92M | -285.32M | -507.12M | -225.39M | -215.69M | -256.43M |
Alliance Resource Technical Analysis
Neutral
24.10
Price Trends
24.50
Negative
25.03
Negative
25.02
Negative
Market Momentum
-0.08
Negative
58.64
Neutral
82.29
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLP, the sentiment is Neutral. The current price of 24.1 is above the 20-day moving average (MA) of 23.18, below the 50-day MA of 24.50, and below the 200-day MA of 25.02, indicating a neutral trend. The MACD of -0.08 indicates Negative momentum. The RSI at 58.64 is Neutral, neither overbought nor oversold. The STOCH value of 82.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ARLP.
Alliance Resource Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | 1.36B | 9.63 | 2.97% | 4.08% | -20.92% | -26.59% | |
72 Outperform | $3.12B | 13.38 | 12.59% | 11.10% | -8.59% | -55.01% | |
67 Neutral | 2.02B | -90.13 | -5.70% | 1.44% | -12.79% | -134.14% | |
67 Neutral | 3.14B | 23.30 | 3.78% | 1.16% | -5.83% | -73.88% | |
64 Neutral | 3.28B | 80.64 | 1.94% | 0.51% | -27.62% | -90.48% | |
57 Neutral | 2.16B | -58.05 | -2.31% | ― | -29.63% | -108.26% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% |
* Energy Sector Average
Performance Comparison
ARLP
Alliance Resource
24.10
1.54
6.83%
NRP
Natural Resource PRN
103.16
7.29
7.60%
AMR
Alpha Metallurgical Resources
163.98
-77.21
-32.01%
METC
Ramaco Resources
32.98
22.42
212.31%
HCC
Warrior Met Coal
64.22
-0.04
-0.06%
BTU
Peabody Energy Comm
24.54
-1.03
-4.03%
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.