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Warrior Met Coal (HCC)
NYSE:HCC
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Warrior Met Coal
(NYSE:HCC)
Rating:64Neutral
Price Target:
$54.00
â–²(1.94%Upside)
Positive Factors
Financial Performance
Warrior's 1Q EBITDA beat consensus, driven by higher-than-expected volumes and lower-than-expected costs.
Operational Achievements
Warrior shares have significantly outperformed other US coal miners due to the company's operational achievements and milestones met for the Blue Creek development.
Project Development
The Blue Creek project remains on time and budget, with the initial coal shipments occurring ahead of schedule.
Negative Factors
Cash Flow Challenges
4Q free cash flow was negative $88M, leading to a significant decline in cash and cash equivalents.
Earnings Miss
Warrior Met Coal reported 4Q adjusted EBITDA of $53M, missing the $74M consensus due to a weaker top line and higher cash cost per ton.
Market Conditions
Coal market weakness is a clear ongoing concern, affecting overall sentiment despite positive developments at Blue Creek.
Warrior Met Coal (HCC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.69B
Dividend Yield0.63%
Average Volume (3M)1.04M
Price to Earnings (P/E)25.4
Beta (1Y)1.23
Revenue Growth-21.04%
EPS Growth-75.78%
CountryUS
Employees1,336
SectorBasic Materials
Sector Strength75
IndustryCoal
Share Statistics
EPS (TTM)-0.16
Shares Outstanding52,559,284
10 Day Avg. Volume1,251,916
30 Day Avg. Volume1,038,219
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)1.50
Price to Sales (P/S)0.00
P/FCF Ratio43.40
Enterprise Value/Market Cap0.47
Enterprise Value/Revenue0.21
Enterprise Value/Gross Profit2.86
Enterprise Value/Ebitda0.69
Forecast
1Y Price Target
$57.83Price Target Upside9.18% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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: 10.96%|
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 has a robust balance sheet with low leverage and a strong equity focus. However, declining revenues, contracting profit margins, and reduced free cash flow highlight operational challenges and potential constraints on growth investments.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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 855.92M | 1.53B | 1.68B | 1.74B | 1.06B | 782.74M |
| Gross Profit | 231.07M | 1.48B | 601.51M | 1.00B | 476.04M | 123.83M |
| EBITDA | 174.46M | 447.35M | 700.91M | 920.86M | 380.02M | 97.50M |
| Net Income | -21.32M | 250.60M | 478.63M | 641.30M | 150.88M | -35.76M |
Balance Sheet | ||||||
| Total Assets | 0.00 | 2.59B | 2.36B | 2.03B | 1.46B | 1.39B |
| Cash, Cash Equivalents and Short-Term Investments | 79.76M | 506.17M | 747.23M | 838.09M | 404.34M | 220.42M |
| Total Debt | 0.00 | 173.04M | 173.24M | 335.68M | 391.86M | 418.38M |
| Total Liabilities | 0.00 | 500.70M | 482.61M | 580.58M | 592.23M | 668.70M |
| Stockholders Equity | -820.86M | 2.09B | 1.87B | 1.45B | 871.98M | 725.24M |
Cash Flow | ||||||
| Free Cash Flow | 157.72M | -89.77M | 209.43M | 633.16M | 293.65M | 25.14M |
| Operating Cash Flow | 207.30M | 367.45M | 701.11M | 841.90M | 351.54M | 112.63M |
| Investing Cash Flow | -76.53M | -538.00M | -527.21M | -255.14M | -71.15M | -108.19M |
| Financing Cash Flow | -78.80M | -68.51M | -265.18M | -153.12M | -96.47M | 14.10M |
Warrior Met Coal Technical Analysis
Positive
52.97
Price Trends
46.80
Positive
47.26
Positive
53.82
Negative
Market Momentum
1.20
Negative
65.98
Neutral
86.87
Negative
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 52.97 is above the 20-day moving average (MA) of 46.66, above the 50-day MA of 46.80, and below the 200-day MA of 53.82, indicating a neutral trend. The MACD of 1.20 indicates Negative momentum. The RSI at 65.98 is Neutral, neither overbought nor oversold. The STOCH value of 86.87 is Negative, 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 0 New Risks
Warrior Met Coal Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.80B | 5.56 | 10.33% | 2.02% | -7.42% | -26.06% | |
76 Outperform | $3.45B | 12.61 | 14.71% | 10.43% | -8.53% | -53.44% | |
71 Outperform | $1.29B | 9.44 | 31.98% | 3.05% | -19.21% | -30.92% | |
69 Neutral | $654.01M | 43.10 | -0.08% | 1.65% | -10.23% | -100.04% | |
67 Neutral | $1.53B | 60.74 | 1.66% | 0.36% | -23.34% | -95.18% | |
64 Neutral | $2.69B | 25.43 | 5.20% | 0.63% | -21.04% | -75.78% | |
62 Neutral | $10.33B | 10.17 | -0.16% | 2.78% | 2.22% | -32.59% |
* Basic Materials Sector Average
Performance Comparison
HCC
Warrior Met Coal
52.97
-19.53
-26.94%
ARLP
Alliance Resource
27.33
4.89
21.79%
NRP
Natural Resource PRN
98.29
6.34
6.90%
AMR
Alpha Metallurgical Resources
122.59
-197.32
-61.68%
METC
Ramaco Resources
16.62
2.78
20.09%
BTU
Peabody Energy Comm
15.25
-7.86
-34.01%
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
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.