Alliance Resource (ARLP) AI Stock Analysis

• Market Cap: $2.95B
• Dividend Yield: 11.86%
• Average Volume (3M): 437.12K
• Price to Earnings (P/E): 12.6
• Beta (1Y): 0.34
• Revenue Growth: -8.59%
• EPS Growth: -55.01%
• Country: US
• Employees: 3,653
• Sector: Energy
• Sector Strength: 66
• Industry: Coal
• EPS (TTM): 0.46
• Shares Outstanding: 128,428,020
• 10 Day Avg. Volume: 506,840
• 30 Day Avg. Volume: 437,121
• PEG Ratio: -0.22
• Price to Book (P/B): 1.84
• Price to Sales (P/S): 1.37
• P/FCF Ratio: 8.99
• Enterprise Value/Market Cap: 1.29
• Enterprise Value/Revenue: 1.66
• Enterprise Value/Gross Profit: 9.24
• Enterprise Value/Ebitda: 6.41
• 1Y Price Target: $29.00
• Price Target Upside: 27.42% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 72 Outperform
• Price Target: $26.00 ▲(14.24% 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

Market Conditions

The combination of a more constructive regulatory backdrop and increasing electricity demand has management believing in the most encouraging domestic coal market.

Sales Growth

Tunnel Ridge has now moved into a more favorable district which should drive improved Appalachia sales and expense/ton.

Negative Factors

Earnings

ARLP reported 2Q adjusted EBITDA of $162M, falling short of the $169M consensus and our $170M estimate.

Operational Challenges

The Appalachia segment faced challenges with higher-than-expected expenses and lower recoveries, affecting overall results.

Price Decline

Management continues to anticipate a ~5% y/y average price/ton decline in 2026 as higher priced contracts roll off.

Alliance Resource Business Overview & Revenue Model

Company Description

Alliance Resource Partners, L.P. (ARLP) is a leading producer and marketer of coal in the United States, primarily focused on the production of high-quality thermal and metallurgical coal used for power generation and steel manufacturing. The company operates several mining complexes across the Illinois Basin and the Appalachian region, enabling it to serve a diverse customer base that includes electric utilities and industrial customers. ARLP is committed to operational excellence and sustainability, leveraging advanced mining techniques and technologies to enhance productivity and minimize environmental impact.

How the Company Makes Money

Alliance 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 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.

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.

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.

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

• Technical Analysis Sentiment: Negative
• Last Price: 22.76
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLP, the sentiment is Negative. The current price of 22.76 is below the 20-day moving average (MA) of 23.79, below the 50-day MA of 25.21, and below the 200-day MA of 25.19, indicating a bearish trend. The MACD of -0.76 indicates Positive momentum. The RSI at 30.10 is Neutral, neither overbought nor oversold. The STOCH value of 28.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARLP.

Alliance Resource Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NRP	73 Outperform	$1.36B	9.74	28.59%	4.05%	-20.92%	-26.59%
ARLP	72 Outperform	$2.95B	12.63	12.59%	11.86%	-8.59%	-55.01%
BTU	67 Neutral	$2.04B	16.39	3.87%	1.72%	-5.83%	-73.88%
Sector *	66 Neutral	$15.26B	7.30	3.22%	5.27%	4.16%	-60.82%
HCC	64 Neutral	$3.00B	74.05	1.95%	0.57%	-27.62%	-90.48%
AMR	57 Neutral	$1.83B	64.14	-2.29%	0.36%	-29.63%	-108.26%
CNR	48 Neutral	$3.64B	32.52	0.79%	0.42%	45.25%	-83.80%

Alliance Resource Corporate Events

Alliance Resource Expands Board with Strategic Appointment

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.