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Alliance Resource Partners L.P. (ARLP)
NASDAQ:ARLP
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Alliance Resource
(NASDAQ:ARLP)
78Outperform
Positive Factors
Analyst Recommendation
Analyst recommends a Buy rating for Alliance Resource Partners LP, indicating confidence in the stock's potential.
Stock Valuation
The price target for Alliance Resource Partners LP has been raised from $27.00 to $29.00, showing an expected increase in stock value.
Negative Factors
Financial Performance
Alliance Resource Partners LP experienced a miss in the 4Q performance.
Alliance Resource (ARLP) vs. S&P 500 (SPY)
Market Cap
$3.19B
Dividend Yield11.29%
Average Volume (3M)424.46K
Price to Earnings (P/E)9.0
Beta (1Y)0.34
Revenue Growth-4.60%
EPS Growth-42.35%
CountryUS
Employees3,595
SectorEnergy
Sector Strength73
IndustryFossil Fuels
Share Statistics
EPS (TTM)2.77
Shares Outstanding128,428,020
10 Day Avg. Volume409,932
30 Day Avg. Volume424,459
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.30
Price to Cash Flow (P/CF)4.70
P/FCF Ratio4.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$30.50Price Target Upside23.03% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Alliance Resource Business Overview & Revenue Model
Company DescriptionAlliance Resource Partners LP produces and markets coal to United States utilities and industrial users. It operates through the following segments: Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment is comprised of Webster County coal's Dotiki mining complex, Gibson mining complex, which includes the Gibson north mine and the Gibson south project, Hopkins County coal's Elk Creek mining complex, White County coal's Pattiki mining complex, Warrior's mining complex, River View's mining complex, the Sebree property and certain properties of Alliance Resource Properties and ARP Sebree LLC. The Appalachian segment is composed of Pontiki and MC Mining complexes. The Other and Corporate segment includes marketing and administrative expenses, Mt. Vernon dock activities, coal brokerage activity, its equity investment in Mid-America Carbonates LLC and certain activities of Alliance Resource Properties. The company was founded in May 1999 and is headquartered in Tulsa, OK.
How the Company Makes MoneyAlliance Resource Partners generates revenue primarily through the production and sale of coal. The company operates several mining complexes that extract and process coal, which is then sold to utility and industrial customers under long-term contracts and spot market sales. The pricing of coal contracts typically considers market conditions and demand fluctuations. Additionally, ARLP benefits from its investments in oil and gas mineral rights, providing an ancillary revenue stream from royalties on oil and gas production. These resources are leveraged through partnerships and leases with exploration and production companies, contributing to its overall earnings.
Alliance Resource Financial Statement Overview
Summary
Alliance Resource exhibits strong growth and financial stability, particularly in revenue and cash flows. The company has demonstrated effective management of leverage and equity positions, contributing to its sound financial health. Opportunities exist to enhance operational efficiency and return on equity to further bolster its financial standing.Income Statement
Alliance Resource shows robust performance in the TTM period with a substantial gross profit margin of 99.76% and a net profit margin of 2.82%. The revenue growth rate from 2023 to TTM is exceptionally strong at approximately 23067%, indicating significant expansion. However, the EBIT margin of 2.66% and EBITDA margin of 15.49% suggest potential for improved operational efficiency.85
Very Positive
Balance Sheet
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.02, indicating conservative leverage. The equity ratio is high at 71.58%, reflecting financial stability. However, the return on equity of 0.8% suggests limited efficiency in generating returns from equity.78
Positive
Cash Flow
Free cash flow growth is impressive at 16638% in the TTM period, showing strong cash generation capabilities. The operating cash flow to net income ratio of 10.14 indicates efficient conversion of profits into cash flows. The free cash flow to net income ratio of 4.53 suggests robust cash flow relative to net earnings.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.97B | 2.45B | 2.57B | 2.41B | 1.57B | 1.33B | Gross Profit |
| 736.68M | 2.45B | 751.49M | 1.01B | 289.36M | 133.96M | EBIT |
| 522.74M | 394.13M | 672.40M | 1.21B | -42.98M | -239.79M | EBITDA |
| 658.23M | 627.01M | 948.52M | 934.16M | 483.47M | 234.02M | Net Income Common Stockholders |
| 300.42M | 360.86M | 630.12M | 586.20M | 182.77M | -129.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 136.96M | 136.96M | 59.81M | 296.02M | 122.40M | 55.57M | Total Assets |
| 2.92B | 2.92B | 2.79B | 1.05B | 2.16B | 2.17B | Total Debt |
| 35.91M | 35.91M | 350.82M | 434.31M | 450.66M | 609.78M | Net Debt |
| -101.05M | -101.05M | 291.01M | 138.28M | 328.25M | 554.20M | Total Liabilities |
| 829.05M | 829.05M | 929.83M | 1.02B | 933.34M | 1.09B | Stockholders Equity |
| 2.09B | 2.09B | 1.83B | 1.61B | 1.21B | 1.06B |
| Cash Flow | Free Cash Flow | ||||
| 282.00M | 374.39M | 451.30M | 505.42M | 302.22M | 279.54M | Operating Cash Flow |
| 502.30M | 803.13M | 830.64M | 791.81M | 425.20M | 400.64M | Investing Cash Flow |
| -255.78M | -440.66M | -559.73M | -403.34M | -142.69M | -125.12M | Financing Cash Flow |
| -178.18M | -285.32M | -507.12M | -214.85M | -215.69M | -256.43M |
Alliance Resource Technical Analysis
Negative
24.79
Price Trends
26.46
Negative
25.98
Negative
24.31
Positive
Market Momentum
-0.53
Positive
33.85
Neutral
19.08
Positive
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 24.79 is below the 20-day moving average (MA) of 26.06, below the 50-day MA of 26.46, and above the 200-day MA of 24.31, indicating a neutral trend. The MACD of -0.53 indicates Positive momentum. The RSI at 33.85 is Neutral, neither overbought nor oversold. The STOCH value of 19.08 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARLP.
Alliance Resource Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.19B | 8.95 | 19.34% | 11.29% | -4.60% | -42.35% | |
72 Outperform | $2.44B | 14.16 | 12.64% | 0.74% | -17.03% | -78.54% | |
72 Outperform | $1.68B | 4.78 | 10.41% | 2.33% | -14.50% | -46.36% | |
70 Outperform | $3.87B | 7.01 | 19.67% | 0.70% | -13.20% | -51.56% | |
69 Neutral | $2.47B | 9.77 | 12.64% | 0.68% | -9.10% | -47.93% | |
67 Neutral | $782.79M | 8.01 | 14.82% | 5.11% | -6.19% | 65.91% | |
57 Neutral | $8.36B | 5.49 | -6.03% | 7.47% | 0.03% | -68.64% |
* Energy Sector Average
Performance Comparison
ARLP
Alliance Resource
24.79
7.25
41.33%
ARCH
Arch Resources
134.83
-32.07
-19.22%
SXC
Suncoke Energy
9.28
-1.34
-12.62%
HCC
Warrior Met Coal
48.88
-5.61
-10.30%
BTU
Peabody Energy Comm
13.81
-11.09
-44.54%
CNR
Core Natural Resources
76.41
-4.50
-5.56%
Alliance Resource Earnings Call Summary
Earnings Call Date: Feb 3, 2025 | % Change Since: -11.40% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong liquidity, record oil and gas royalties, and a positive impact from Bitcoin mining, alongside challenges such as a decline in revenue and net income, difficult mining conditions, lower coal sales and production, and increased costs.Highlights
Strong Liquidity and Balance Sheet
Total liquidity was $593.9 million at year-end, with $137 million in cash and 482 Bitcoin valued at $45 million.
Record Oil and Gas Royalties
Achieved record oil and gas royalty volumes for the full-year 2024, with increased drilling and completion activities.
Improved Safety Record
Safety statistics for the full-year 2024 were 34% below 2023, marking one of the safest periods ever for the company.
Positive Impact from Bitcoin Mining
The Bitcoin mining operation positively impacted net income with a $22.4 million positive change in digital asset valuation.
Lowlights
Decline in Revenue and Net Income
Total revenues for the fourth quarter were $590.1 million, down from $625.4 million in the fourth quarter of 2023, with net income dropping to $16.3 million from $115.4 million.
Challenging Mining Conditions
Reduced volumes in the Appalachia region due to difficult mining conditions at Tunnel Ridge and Mettiki, lower recoveries, and shipping delays.
Lower Coal Sales and Production
Total coal production was 12.4% lower in the fourth quarter compared to the previous year, with coal sales volumes decreasing by 2.3%.
Increased Costs
Segment-adjusted EBITDA expense per ton sold for coal operations increased by 12.1% year-over-year.
Impairment and Non-Cash Charges
The quarter included a $31.1 million non-cash impairment charge and $13.1 million of non-cash accruals for long-term liabilities.
Company Guidance
During the earnings call, Alliance Resource Partners LP provided guidance for 2025, anticipating coal sales volumes to range between 32.25 million and 34.25 million tons, with over 78% of these volumes committed and priced at the midpoint. The company expects a coal sales price per ton range of $50 to $53 in the Illinois Basin and $76 to $82 in Appalachia. They project segment adjusted EBITDA expense per ton to be $35 to $38 in the Illinois Basin and $53 to $60 in Appalachia. Additionally, capital expenditures are forecasted to decrease significantly to $285 million to $320 million as major infrastructure projects near completion. The company also plans to continue investing in their oil and gas royalties business, projecting oil, natural gas, and natural gas liquids sales volumes to reach record levels on a BOE basis.Alliance Resource Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Alliance Resource Expands Board with Strategic Appointment
Positive
Dec 13, 2024
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.
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.