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Ramaco Resources (METC)
:METC

Ramaco Resources (METC) AI Stock Analysis

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Ramaco Resources

(NASDAQ:METC)

Rating:62Neutral
Price Target:
$9.50
▲( 4.74% Upside)
Ramaco Resources' overall score is driven primarily by financial performance challenges, including recent profitability issues and valuation concerns. Technical indicators present a mixed outlook with uncertainty in market direction. The earnings call provides some positive insight into operational strengths and future growth prospects, but reduced guidance and financial losses weigh heavily on the company's outlook.
Positive Factors
Earnings
Ramaco reported adjusted EBITDA of $9.8M, beating consensus expectations due to better than expected sales volumes and costs.
Financial Strategy
The company believes it can finance its Brook Mine project on its own, showing confidence in its financial strategy.
Operational Efficiency
The company trimmed its full-year cash cost per ton and capital expenditure targets, indicating more efficient operations.
Negative Factors
Financial Performance
Full-year EBITDA estimate declines to $120M from $198M after incorporating updates and a lower met price deck.
Market Conditions
Weak market conditions have led to a reduction in shipment forecasts and a downward revision in pricing expectations.
Sales Guidance
Ramaco has trimmed full-year production and sales guidance due to expected continued weak market conditions.

Ramaco Resources (METC) vs. SPDR S&P 500 ETF (SPY)

Ramaco Resources Business Overview & Revenue Model

Company DescriptionRamaco Resources, Inc. produces and sells metallurgical coal. The company's development portfolio includes the Elk Creek project consisting of approximately 20,200 acres of controlled mineral and 16 seams located in southern West Virginia; the Berwind property comprising approximately 41,300 acres of controlled mineral and an area of Squire Jim seam coal deposits, which is situated on the border of West Virginia and Virginia; the Knox Creek property consisting of approximately 62,100 acres of controlled mineral that is located in Virginia; and the RAM Mine property comprising approximately 1,570 acres of controlled mineral, which is situated in southwestern Pennsylvania. The company serves blast furnace steel mills and coke plants in the United States, as well as international metallurgical coal consumers. The company was founded in 2015 and is headquartered in Lexington, Kentucky.
How the Company Makes MoneyRamaco Resources generates revenue primarily through the extraction and sale of metallurgical coal, which is a critical component in the steelmaking process. The company sells its coal to a diverse customer base, including major steel producers in the United States and abroad. Revenue is largely driven by the volume of coal produced and sold, as well as the prevailing market prices for metallurgical coal. Additionally, Ramaco Resources benefits from operational efficiencies and strategic investments in its mining operations, which help to control costs and maximize profitability. The company may also engage in strategic partnerships or long-term contracts with key customers, providing a stable revenue stream and enhancing its market position.

Ramaco Resources Financial Statement Overview

Summary
Ramaco Resources presents a mixed financial performance with strong operational efficiencies but faces challenges in revenue growth and profit margins. The balance sheet remains solid, but increasing debt levels warrant attention. Cash flow generation is strong, yet free cash flow consistency needs improvement.
Income Statement
60
Neutral
Ramaco Resources showed a volatile revenue trajectory with a decline in the latest period compared to the previous year. The gross profit margin remained high, reflecting efficient cost management. However, the net profit margin has decreased significantly, indicating pressure on bottom-line profitability.
Balance Sheet
70
Positive
The company's balance sheet is relatively strong with a moderate debt-to-equity ratio, indicating a balanced leverage position. The equity ratio is stable, suggesting a solid equity base. However, there is a noticeable increase in total debt, which could pose a risk if it continues to rise.
Cash Flow
65
Positive
Operating cash flow remained robust, demonstrating the company's ability to generate cash from operations. However, free cash flow growth has been inconsistent, and the free cash flow to net income ratio indicates potential concerns with cash conversion efficiency.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
666.29M693.52M565.69M283.39M168.91M
Gross Profit
133.00M199.73M232.73M87.98M23.41M
EBIT
16.64M95.25M150.39M39.53M-7.17M
EBITDA
86.66M150.90M192.70M73.78M14.31M
Net Income Common Stockholders
11.19M82.31M116.04M39.76M-4.91M
Balance SheetCash, Cash Equivalents and Short-Term Investments
33.01M41.96M35.61M21.89M5.30M
Total Assets
674.69M665.84M596.34M329.03M228.62M
Total Debt
132.34M100.55M138.11M51.44M17.45M
Net Debt
99.33M58.59M102.50M29.55M12.15M
Total Liabilities
311.88M296.23M287.14M117.96M59.53M
Stockholders Equity
362.81M369.61M309.20M211.07M169.09M
Cash FlowFree Cash Flow
57.43M78.13M64.86M23.87M-11.44M
Operating Cash Flow
112.67M161.04M187.87M53.34M13.31M
Investing Cash Flow
-70.83M-72.21M-145.71M-59.61M-24.75M
Financing Cash Flow
-50.79M-82.52M-28.50M22.37M11.29M

Ramaco Resources Technical Analysis

Technical Analysis Sentiment
Negative
Last Price9.07
Price Trends
50DMA
9.02
Positive
100DMA
9.28
Negative
200DMA
10.19
Negative
Market Momentum
MACD
-0.05
Positive
RSI
47.55
Neutral
STOCH
35.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For METC, the sentiment is Negative. The current price of 9.07 is below the 20-day moving average (MA) of 9.48, above the 50-day MA of 9.02, and below the 200-day MA of 10.19, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 47.55 is Neutral, neither overbought nor oversold. The STOCH value of 35.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for METC.

Ramaco Resources Risk Analysis

Ramaco Resources disclosed 97 risk factors in its most recent earnings report. Ramaco Resources 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 3 New Risks
1.
We may be able to incur substantially more debt, which could have important consequences to you. Q4, 2024
2.
Our future indebtedness could adversely affect our business, financial condition, results of operations, and ability to meet our payment obligations under the Senior Notes and our other debt. Q4, 2024
3.
The Senior Notes are unsecured and therefore are effectively subordinated to any secured indebtedness that we currently have or that we may incur in the future and rank pari passu with, which means equal to, all outstanding and future unsecured unsubordinated indebtedness issued by us and our general liabilities. Q4, 2024

Ramaco Resources Peers Comparison

Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
BTBTU
80
Outperform
$1.69B5.2110.33%2.16%-7.42%-26.06%
80
Outperform
$3.38B12.3614.71%10.64%-8.53%-53.44%
SXSXC
71
Outperform
$711.92M7.7114.26%5.47%-8.76%51.59%
62
Neutral
$487.21M43.10-0.08%4.55%-10.23%-100.04%
AMAMR
61
Neutral
$1.51B57.451.66%0.36%-23.34%-95.18%
HCHCC
59
Neutral
$2.38B22.505.20%0.71%-21.04%-75.78%
50
Neutral
$2.00B-1.13-21.16%3.71%2.15%-30.95%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
METC
Ramaco Resources
9.07
-4.55
-33.41%
ARLP
Alliance Resource
26.32
4.79
22.25%
SXC
Suncoke Energy
8.41
-1.60
-15.98%
AMR
Alpha Metallurgical Resources
115.96
-193.77
-62.56%
HCC
Warrior Met Coal
45.29
-20.66
-31.33%
BTU
Peabody Energy Comm
13.91
-9.40
-40.33%

Ramaco Resources Earnings Call Summary

Earnings Call Date:May 12, 2025
(Q1-2025)
|
% Change Since: 0.89%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
Ramaco Resources faced significant challenges in the first quarter due to declining met coal prices and weather-related production impacts. However, the company reported strong operational performance, with record production and high cash margins. The initiation of the Brook Mine project and strategic personnel additions are promising for future growth. Despite these positives, reduced guidance and financial losses weigh heavily on the overall outlook.
Q1-2025 Updates
Positive Updates
Record Mine Production
Ramaco achieved a quarterly record with 1 million tons of met coal produced, despite challenging weather conditions affecting output by 150,000 tons.
High Cash Margins and Sales Price
Ramaco reported the highest cash margins per ton and the highest realized sales price among its peers, despite a challenging market environment.
Initiation of Rare Earth Project
Ramaco announced the initiation of large-scale mining at the Brook Mine, marking it as the first new rare earth mine in the U.S. in over 70 years.
Addition of Key Personnel
Mike Woloschuk was added to the senior management team from Fluor Corporation to oversee the critical minerals project.
Improved CapEx Guidance
CapEx guidance was reduced from $60-70 million to $55-65 million due to optimized production strategies.
Negative Updates
Decline in Met Coal Prices
Both U.S. and Australian met coal prices continued to decline, affecting earnings and leading to a 175,000 ton decline in tons sold.
Weather-Related Production Impact
Extreme weather conditions, including freezing temperatures and historic flooding, negatively impacted production by approximately 150,000 tons.
Reduced 2025 Production and Sales Guidance
Due to weak market conditions, Ramaco reduced its 2025 production guidance to 3.9-4.3 million tons and sales guidance to 4.1-4.5 million tons.
Financial Losses in Q1
Q1 adjusted EBITDA was $10 million compared to $29 million in Q4, and there was a net loss of $9 million compared to Q4 net income of $4 million.
Increased SG&A Expenses
SG&A guidance increased due to higher legal expenses related to a lawsuit against Chubb Insurance, with anticipated trial this summer.
Company Guidance
During the first quarter of 2025, Ramaco Resources reported strong operational performance despite a challenging macroeconomic environment. The company achieved the highest cash margins per ton and realized sales price among its publicly traded peers, even though U.S. and Australian met coal prices declined. Adjusted EBITDA for the quarter was $10 million, with a net loss of $9 million, affected by a $7 per ton drop in realized pricing and a 175,000-ton decrease in sales. Mine production reached a quarterly record of 1 million tons, annualizing to 4 million tons, with cash costs per ton sold remaining below $100. However, severe weather conditions in January and February reduced production by approximately 150,000 tons. Looking forward, Ramaco has reduced its 2025 production guidance to between 3.9 million and 4.3 million tons and sales to between 4.1 million and 4.5 million tons, due to ongoing market weakness. The company remains optimistic about future market conditions and the potential to increase production if demand improves. Additionally, Ramaco is advancing its Brook Mine rare earth project, which is expected to produce approximately 1,400 metric tons of critical mineral oxides annually, with initial mine operations set to begin later in 2025.

Ramaco Resources Corporate Events

DividendsBusiness Operations and StrategyFinancial Disclosures
Ramaco Resources Announces Cash Dividend Amid Q1 Loss
Neutral
May 12, 2025

On May 12, 2025, Ramaco Resources announced a cash dividend of $0.1811 per share for its Class B common stock, payable on June 13, 2025. The company reported a net income loss of $9.5 million for the first quarter of 2025, with significant production achievements despite adverse weather conditions. Ramaco is adjusting its 2025 guidance due to weak market conditions, reducing production and capital expenditure expectations. The company is advancing its rare earth and critical minerals project at the Brook Mine in Wyoming, with plans to commence large-scale mining in June 2025. A $6.1 million matching grant from Wyoming supports this initiative, highlighting its strategic importance amid global supply chain concerns.

The most recent analyst rating on (METC) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Ramaco Resources stock, see the METC Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Ramaco Resources Appoints Joseph Manchin to Board
Positive
Apr 21, 2025

On April 18, 2025, Ramaco Resources appointed former U.S. Senator Joseph Manchin III as an independent member of its Board of Directors, effective immediately. Manchin, known for his leadership in energy policy and economic development, will bring valuable insights to the company, particularly as it advances its rare earth element development in Wyoming. His appointment is seen as a strategic move to enhance Ramaco’s positioning in the U.S. coal industry and critical mineral supply chains, with implications for national security and economic resilience.

Executive/Board ChangesBusiness Operations and Strategy
Ramaco Resources Announces Leadership and Board Changes
Neutral
Mar 18, 2025

On March 18, 2025, Ramaco Resources announced changes in its executive leadership and Board of Directors. E. Forrest Jones, Jr. resigned from the Board effective March 14, 2025, to become the new General Counsel starting May 1, 2025. He was honored with the title of Director Emeritus. Evan H. Jenkins, the current General Counsel and Secretary, was appointed to the Board and named Vice-Chairman, effective March 14, 2025. Jenkins will continue as Secretary after stepping down as General Counsel upon Jones’ commencement. These changes reflect strategic leadership adjustments aimed at leveraging the extensive legal and regulatory expertise of both Jones and Jenkins to strengthen the company’s operations and governance.

Private Placements and FinancingBusiness Operations and Strategy
Ramaco Resources Secures Grant for Rare Earth Project
Positive
Mar 17, 2025

On March 17, 2025, Ramaco Resources announced it received a $6.1 million matching grant from the Wyoming Energy Authority for its Wyoming CORE Brook Mine project. This funding supports the construction of a rare earth and critical minerals pilot processing facility in Sheridan, Wyoming, marking the first new rare earth mine in the U.S. since 1952. The project aims to extract valuable rare earth elements and critical minerals from unconventional coal and carbonaceous ore deposits, potentially positioning Wyoming as a key player in meeting national energy and security needs.

Business Operations and StrategyFinancial Disclosures
Ramaco Resources Achieves Record Q4 Performance in 2024
Positive
Mar 10, 2025

Ramaco Resources reported its strongest operational and financial quarter of 2024 in Q4, achieving a 24% increase in Adjusted EBITDA to $29.2 million despite a decline in metallurgical coal prices. The company sold a record 1.1 million tons, reduced cash costs, and maintained solid cash margins per ton sold. Looking ahead to 2025, Ramaco anticipates continued operational progress, with significant sales commitments and ongoing development of its rare earth and critical minerals project in Wyoming.

Dividends
Ramaco Resources Announces Q1 2025 Stock Dividend
Positive
Mar 4, 2025

On March 4, 2025, Ramaco Resources announced the dividend ratio for its previously declared Class A common stock dividend for the first quarter of 2025. Shareholders of record on February 28, 2025, will receive a dividend payable in Class B common stock, with each Class A shareholder receiving 0.015537 of a Class B share per Class A share, based on the Class B closing price of $8.85. No fractional shares will be issued, and cash will be paid for any fractional shares. This announcement reflects Ramaco’s ongoing commitment to shareholder value and its strategic financial management.

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.