Warrior Met Coal (HCC) AI Stock Analysis

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Warrior Met Coal

(NYSE:HCC)

Rating:59Neutral

Price Target:

$47.00

▼(-2.65%Downside)

Warrior Met Coal faces significant challenges with declining revenues and profitability, compounded by a bearish technical outlook. Despite strong balance sheet fundamentals and effective cost management, the high P/E ratio suggests overvaluation, and the market environment remains challenging due to adverse pricing and trade conditions. Strategic initiatives, such as the Blue Creek project, offer potential long-term benefits but are currently overshadowed by short-term headwinds.

Positive Factors

Operational Performance

Warrior's 1Q EBITDA beat consensus, due to higher-than-expected volumes and lower-than-expected costs.

Project Development

The Blue Creek project remains on time and budget, allowing HCC to begin shipping small amounts of Blue Creek coal ahead of schedule.

Negative Factors

Market Conditions

Coal market weakness is a clear ongoing concern.

Market Outlook

Met coal markets have been very weak, and the outlook for the remainder of 2025 is not good, especially if trade wars negatively affect global growth.

Warrior Met Coal (HCC) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.54B

Dividend Yield0.71%

Average Volume (3M)842.92K

Price to Earnings (P/E)24.0

Beta (1Y)1.20

Revenue Growth-21.04%

EPS Growth-75.78%

CountryUS

Employees1,336

SectorBasic Materials

Sector Strength65

IndustryCoal

Share Statistics

EPS (TTM)-0.16

Shares Outstanding52,559,284

10 Day Avg. Volume905,170

30 Day Avg. Volume842,921

Financial Highlights & Ratios

PEG Ratio-0.39

Price to Book (P/B)1.15

Price to Sales (P/S)0.00

P/FCF Ratio-14.67

Enterprise Value/Market Cap0.83

Enterprise Value/Revenue0.34

Enterprise Value/Gross Profit4.74

Enterprise Value/Ebitda1.14

Forecast

1Y Price Target

$60.20

Price Target Upside24.69% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering6

Warrior Met Coal Business Overview & Revenue Model

Company DescriptionWarrior Met Coal (HCC) is a U.S.-based company primarily engaged in the production and export of premium metallurgical coal. The company operates two underground mines located in Alabama, utilizing longwall mining techniques to extract high-quality coal used in steel production. As a leading producer of metallurgical coal, Warrior Met Coal serves international markets, supplying coal to steel manufacturers around the world.

How the Company Makes MoneyWarrior Met Coal generates revenue through the extraction, processing, and sale of metallurgical coal, which is primarily used in steel production. The company's revenue model is centered around mining and exporting premium-grade coal to global markets, particularly in Asia, Europe, and South America. Key revenue streams include long-term supply contracts with steel manufacturers, spot market sales, and strategic partnerships with logistics providers to facilitate efficient coal transportation. The company's earnings are influenced by global steel demand, coal pricing, and operational efficiency in its mining operations.

Warrior Met Coal Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 1.13%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant challenges in the form of declining steelmaking coal prices and a resultant net loss, alongside strong cost management and ongoing progress in the Blue Creek project. While Warrior has maintained a strong liquidity position and increased production volumes, the adverse market conditions and trade challenges weigh heavily on the company's financial performance.

Q1-2025 Updates

Positive Updates

Increased Sales and Production Volumes

First quarter sales volume was 2.2 million short tons, a 2% increase from last year's same quarter. Production volume was 2.3 million short tons, representing a 10% increase from the previous year.

Progress in Blue Creek Project

The Blue Creek project is on budget and schedule, with 251,000 short tons produced in the first quarter. The project has reached $772 million in investment, more than 70% of the expected total, and remains funded by internally generated cash flows.

Strong Liquidity Position

Total available liquidity at the end of the first quarter was $617 million, consisting of cash and cash equivalents of $455 million, short and long-term investments of $48 million, and $114 million available under the ABL facility.

Successful Cost Management

Cash cost of sales per short ton decreased to $112 in the first quarter of 2025 from $133 in the same quarter of 2024, due to lower variable transportation and royalty costs, and tight management of overall spending.

Negative Updates

Decline in Steelmaking Coal Prices

Average premium low vol index prices dropped by 40% compared to last year's first quarter, averaging $168 per short ton in 2025 Q1, down from $280 the previous year. High Vol product prices decreased by 43% in the same period.

Net Loss in Financial Performance

Warrior recorded a net loss on a GAAP basis of $8 million or $0.16 per diluted share in the first quarter of 2025, compared to net income of $137 million or $2.62 per diluted share in the same quarter of 2024.

Decreased Revenues

Total revenues were $300 million in the first quarter of 2025, down from $504 million in the first quarter of 2024, primarily due to a decrease in average gross selling prices.

Impact of Trade and Tariff Policies

Trade flows have been impacted following China's retaliatory tariffs on U.S. steelmaking coals, halting coal trade between both countries and contributing to a weaker pricing environment.

Company Guidance

During the Warrior first quarter 2025 financial results conference call, the company provided guidance amid challenging market conditions. Warrior's management highlighted a 40% drop in average premium low vol index prices to $168 per short ton compared to the first quarter of 2024. Despite this, the company's operational focus enabled a 2% increase in sales volume to 2.2 million short tons and a 10% increase in production volume to 2.3 million short tons. The company maintained a strong contracted volume of 85% for the year, with a projected spot volume of 15%. Warrior reported a gross price realization of 83% for the quarter, slightly below their annual target range of 85% to 90%. Cash cost of sales per short ton was reduced to $112, with an adjusted EBITDA margin of 13%. The company remains committed to completing its Blue Creek project, with a total project investment of $772 million to date, and expects to produce one million short tons from Blue Creek in 2025. Guidance for the year remains unchanged, with anticipated capital expenditures of $225 million to $250 million for 2025, despite the uncertain market environment.

Warrior Met Coal Financial Statement Overview

Summary

Warrior Met Coal exhibits strong balance sheet fundamentals with a focus on equity financing and low leverage, reflected in a high balance sheet score of 85. Despite this, the declining revenue and profitability margins highlighted in the income statement (score of 70) present challenges. The cash flow score of 60 indicates constraints on future growth investments due to decreased free cash flow.

Income Statement

Positive

The company shows a consistent decline in total revenue from 2022 to TTM (Trailing-Twelve-Months), indicating a contraction phase. The gross profit margin has significantly decreased from the previous year, affecting overall profitability. However, the company has managed to maintain a positive net income despite the revenue decline, indicating cost controls. EBIT and EBITDA margins have also contracted, reflecting reduced operational efficiency.

Balance Sheet

Very Positive

The balance sheet remains strong with a high equity ratio and decreasing debt levels, indicating financial stability. The company has a debt-to-equity ratio below 1, showcasing a low leverage level. The return on equity has decreased, reflecting lower profitability in relation to shareholder equity. Overall, the balance sheet reflects a robust capital structure with a focus on equity financing.

Cash Flow

Neutral

Cash flow analysis reveals a significant decrease in free cash flow due to higher capital expenditures, which has negatively impacted cash reserves. The operating cash flow remains positive, indicating effective cash generation from core operations. However, the free cash flow to net income ratio has declined, suggesting reduced cash availability for reinvestment and shareholder returns.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.32B	1.53B	1.68B	1.74B	1.06B	782.74M
	Gross Profit
442.62M	1.48B	601.51M	1.00B	476.04M	123.83M
	EBIT
88.53M	254.89M	541.41M	801.42M	243.75M	-23.59M
	EBITDA
219.44M	447.35M	700.91M	920.86M	380.02M	97.50M
	Net Income Common Stockholders
105.44M	250.60M	478.63M	641.30M	150.88M	-35.76M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
703.01M	506.17M	747.23M	838.09M	404.34M	220.42M
	Total Assets
2.48B	2.59B	2.36B	2.03B	1.46B	1.39B
	Total Debt
172.23M	173.04M	173.24M	335.68M	391.86M	418.38M
	Net Debt
-521.63M	-318.51M	-564.96M	-493.80M	-3.98M	206.47M
	Total Liabilities
500.39M	500.70M	482.61M	580.58M	592.23M	668.70M
	Stockholders Equity
1.98B	2.09B	1.87B	1.45B	871.98M	725.24M
Cash Flow		Free Cash Flow
-162.38M	-89.77M	209.43M	633.16M	293.65M	25.14M
	Operating Cash Flow
274.31M	367.45M	701.11M	841.90M	351.54M	112.63M
	Investing Cash Flow
-514.08M	-538.00M	-527.21M	-255.14M	-71.15M	-108.19M
	Financing Cash Flow
8.51M	-68.51M	-265.18M	-153.12M	-96.47M	14.10M

Warrior Met Coal Technical Analysis

Technical Analysis Sentiment

Positive

Last Price48.28

Price Trends

50DMA

47.08

Positive

100DMA

49.32

Negative

200DMA

55.37

Negative

Market Momentum

MACD

-0.09

Positive

RSI

53.54

Neutral

STOCH

36.24

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCC, the sentiment is Positive. The current price of 48.28 is above the 20-day moving average (MA) of 47.02, above the 50-day MA of 47.08, and below the 200-day MA of 55.37, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 53.54 is Neutral, neither overbought nor oversold. The STOCH value of 36.24 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HCC.

Warrior Met Coal Risk Analysis

Warrior Met Coal disclosed 60 risk factors in its most recent earnings report. Warrior Met Coal 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 1 New Risks

Compliance with import and export requirements, economic sanctions laws, the Foreign Corrupt Practices Act and other applicable anti-corruption laws may increase the risks of doing business internationally. Q4, 2024

Warrior Met Coal Peers Comparison

Overall Rating

UnderperformOutperform

Sector (50)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BTU	80 Outperform	$1.76B	5.41	10.33%	2.16%	-7.42%	-26.06%
ARLP	80 Outperform	$3.38B	12.36	14.71%	10.64%	-8.53%	-53.44%
NRP	68 Neutral	$1.26B	9.23	31.98%	3.11%	-19.21%	-30.92%
METC	62 Neutral	$487.21M	43.10	-0.08%	4.55%	-10.23%	-100.04%
AMR	61 Neutral	$1.51B	57.45	1.66%	0.36%	-23.34%	-95.18%
HCC	59 Neutral	$2.54B	23.98	5.20%	0.71%	-21.04%	-75.78%
Sector *	50 Neutral	$2.00B	-1.13	-21.16%	3.71%	2.15%	-30.95%

* Basic Materials Sector Average

Performance Comparison

HCC

Warrior Met Coal

48.28

-16.49

-25.46%

ARLP

Alliance Resource

26.29

5.27

25.07%

NRP

Natural Resource PRN

96.00

9.82

11.39%

AMR

Alpha Metallurgical Resources

120.37

-187.84

-60.95%

METC

Ramaco Resources

9.40

-3.76

-28.57%

BTU

Peabody Energy Comm

14.44

-8.24

-36.33%

Warrior Met Coal Corporate Events

Executive/Board ChangesShareholder Meetings

Warrior Met Coal Holds Annual Stockholders Meeting

Neutral

Apr 24, 2025

On April 23, 2025, Warrior Met Coal held its Annual Meeting of Stockholders where several key proposals were voted on. The stockholders re-elected five directors to serve until the 2026 Annual Meeting, approved executive compensation, ratified Ernst & Young LLP as the independent public accounting firm for 2025, and rejected a proposal for an independent assessment of the company’s respect for human rights related to freedom of association and collective bargaining.

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.