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Warrior Met Coal (HCC)
NYSE:HCC
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Warrior Met Coal
(NYSE:HCC)
67Neutral
Positive Factors
Financial Performance
Warrior Met Coal reported 1Q adjusted EBITDA of $39M, beating the $34M consensus.
Operational Achievements
Warrior shares have significantly outperformed other US coal miners as the company has delivered operationally and met its milestones.
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
Earnings Miss
Warrior Met Coal reported 4Q adjusted EBITDA of $53M, missing the $74M consensus on a weaker top line and higher cash cost/ton.
Market Conditions
Management believes challenges such as trade uncertainty, seasonal demand weakness, and ample supply are likely to continue.
Market Sentiment
There is concern about coal market fundamentals, which affects overall sentiment despite the positive developments at Blue Creek.
Warrior Met Coal (HCC) vs. S&P 500 (SPY)
Market Cap
$2.49B
Dividend Yield0.7%
Average Volume (3M)1.12M
Price to Earnings (P/E)9.9
Beta (1Y)1.11
Revenue Growth-9.10%
EPS Growth-47.93%
CountryUS
Employees1,336
SectorBasic Materials
Sector Strength59
IndustryCoal
Share Statistics
EPS (TTM)4.79
Shares Outstanding52,559,284
10 Day Avg. Volume888,873
30 Day Avg. Volume1,117,751
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.01
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.70
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$67.67Price Target Upside42.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Warrior Met Coal Business Overview & Revenue Model
Company DescriptionWarrior Met Coal, Inc. (HCC) is a leading producer and exporter of premium metallurgical coal, primarily used as a critical component in the steelmaking process. Headquartered in Brookwood, Alabama, Warrior Met Coal operates two underground mines located in Alabama’s Blue Creek coal seam. The company is dedicated to supplying high-quality coal to the global steel industry, focusing on efficiency, safety, and sustainable practices.
How the Company Makes MoneyWarrior Met Coal generates revenue primarily through the mining and sale of premium metallurgical coal. The company extracts coal from its underground mines, processes it, and sells it to steel producers and industrial customers worldwide. Key revenue streams include long-term sales contracts with international steel manufacturers, spot sales in the domestic and export markets, and strategic partnerships that enhance distribution and logistics capabilities. Warrior Met Coal's earnings are influenced by factors such as global steel demand, coal market prices, production efficiency, and operational cost management. Additionally, the company may engage in hedging activities to mitigate price volatility and secure stable cash flows.
Warrior Met Coal Financial Statement Overview
Summary
Warrior Met Coal exhibits strong balance sheet fundamentals with a focus on equity financing and low leverage. However, the declining revenue and profitability margins highlight challenges in operational efficiency. While the company maintains positive net income and operating cash flows, the reduced free cash flow signals potential constraints on future growth investments. The overall financial position remains solid, but strategic adjustments may be needed to enhance revenue growth and cash flow generation.Income Statement
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.70
Positive
Balance Sheet
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.85
Very Positive
Cash Flow
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.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.53B | 1.68B | 1.74B | 1.06B | 782.74M | Gross Profit |
| 1.48B | 601.51M | 1.00B | 476.04M | 123.83M | EBIT |
| 254.89M | 541.41M | 801.42M | 243.75M | -23.59M | EBITDA |
| 447.35M | 700.91M | 920.86M | 380.02M | 97.50M | Net Income Common Stockholders |
| 250.60M | 478.63M | 641.30M | 150.88M | -35.76M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 506.17M | 747.23M | 838.09M | 404.34M | 220.42M | Total Assets |
| 2.59B | 2.36B | 2.03B | 1.46B | 1.39B | Total Debt |
| 173.04M | 173.24M | 335.68M | 391.86M | 418.38M | Net Debt |
| -318.51M | -564.96M | -493.80M | -3.98M | 206.47M | Total Liabilities |
| 500.70M | 482.61M | 580.58M | 592.23M | 668.70M | Stockholders Equity |
| 2.09B | 1.87B | 1.45B | 871.98M | 725.24M |
| Cash Flow | Free Cash Flow | |||
| -89.77M | 209.43M | 633.16M | 293.65M | 25.14M | Operating Cash Flow |
| 367.45M | 701.11M | 841.90M | 351.54M | 112.63M | Investing Cash Flow |
| -538.00M | -527.21M | -255.14M | -71.15M | -108.19M | Financing Cash Flow |
| -68.51M | -265.18M | -153.12M | -96.47M | 14.10M |
Warrior Met Coal Technical Analysis
Negative
47.39
Price Trends
47.65
Negative
51.25
Negative
57.00
Negative
Market Momentum
0.08
Positive
49.27
Neutral
40.21
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HCC, the sentiment is Negative. The current price of 47.39 is above the 20-day moving average (MA) of 46.73, below the 50-day MA of 47.65, and below the 200-day MA of 57.00, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 49.27 is Neutral, neither overbought nor oversold. The STOCH value of 40.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 0 New Risks
Warrior Met Coal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.49B | 12.71 | 14.76% | 10.61% | -8.53% | -53.30% | |
76 Outperform | $1.51B | 4.60 | 10.41% | 2.42% | -14.50% | -46.36% | |
74 Outperform | $1.35B | 9.03 | 32.48% | 2.94% | -16.56% | -24.95% | |
73 Outperform | $1.65B | 8.91 | 11.64% | 0.36% | -14.81% | -71.49% | |
68 Neutral | $527.33M | 47.94 | 3.06% | 4.14% | -3.93% | -88.36% | |
67 Neutral | $2.49B | 9.90 | 12.64% | 0.70% | -9.10% | -47.93% | |
49 Neutral | $1.95B | -1.37 | -21.43% | 3.74% | 0.84% | -29.84% |
* Basic Materials Sector Average
Performance Comparison
HCC
Warrior Met Coal
47.39
-17.09
-26.50%
ARLP
Alliance Resource
27.16
5.94
27.99%
NRP
Natural Resource PRN
103.02
17.10
19.90%
AMR
Alpha Metallurgical Resources
126.69
-169.95
-57.29%
METC
Ramaco Resources
10.00
-5.00
-33.33%
BTU
Peabody Energy Comm
12.81
-8.74
-40.56%
Warrior Met Coal Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -0.90%|
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 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.
Spark’s Take on HCC Stock
According to Spark, TipRanks’ AI Analyst, HCC is a Outperform.
Warrior Met Coal’s overall stock score reflects a balanced but cautious outlook. Strengths include a robust balance sheet and potential undervaluation, while challenges are evident in declining revenues and cash flow issues. Technical indicators suggest mixed momentum, and recent corporate developments in the Blue Creek project offer positive future prospects.
To see Spark’s full report on HCC stock, click here.
Product-Related AnnouncementsBusiness Operations and Strategy
Warrior Met Coal Boosts Blue Creek Project Capacity
Positive
Feb 21, 2025
On February 21, 2025, Warrior Met Coal announced significant updates on its Blue Creek steelmaking coal project, highlighting an increase in nameplate capacity by 25% to 6.0 million short tons per year, expected to generate substantial incremental revenues and cash flows. The project remains on schedule and within budget, with the first longwall production anticipated by Q2 2026, and is projected to have a transformative impact on the company by enhancing capacity and maintaining its cost-efficient structure, ultimately benefiting a wide range of stakeholders.
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.