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Alliance Resource
(NASDAQ:ARLP)
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Rating:74Outperform
Price Target:
$28.00
▲(13.31% Upside)
Action:Reiterated
Date:07/27/26
The score is driven primarily by strong cash generation and a conservative balance sheet, supported by a positive earnings call featuring maintained guidance, strong forward contracting, and an accretive royalties acquisition. Valuation is helped by a very high dividend yield and a moderate P/E, while the overall score is held back by recent revenue/margin cooling and largely neutral technical positioning near key moving averages.
Positive Factors
Cash Generation
ARLP consistently converts earnings to cash: operating cash flow has historically exceeded net income and free cash flow is positive each year. Durable cash conversion supports distributions, funds capex and M&A, and provides a multi-quarter cushion versus cyclical revenue swings despite FCF volatility.
Negative Factors
Revenue & Margin Cooling
ARLP’s recent trend shows meaningful revenue and margin deterioration from peak years. Sustained lower realizations and compressed margins materially reduce distributable cash flow and returns on capital over several quarters, weakening flexibility to absorb shocks or finance growth organically.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation
ARLP consistently converts earnings to cash: operating cash flow has historically exceeded net income and free cash flow is positive each year. Durable cash conversion supports distributions, funds capex and M&A, and provides a multi-quarter cushion versus cyclical revenue swings despite FCF volatility.
Read all positive factors
Alliance Resource Key Performance Indicators (KPIs)
Any
Adjusted EBITDA by Segment
Isolates operating profitability for each segment after common adjustments, showing which parts of the business generate cash and which drag on margins. Useful for spotting exposure to coal price swings, cost inflation, or operational inefficiencies that could affect distributable cash and valuation.
Isolates operating profitability for each segment after common adjustments, showing which parts of the business generate cash and which drag on margins. Useful for spotting exposure to coal price swings, cost inflation, or operational inefficiencies that could affect distributable cash and valuation.
Data provided by:
The Fly
The FlyAlliance Resource (ARLP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.34B
Dividend Yield9.25%
Average Volume (3M)250.70K
Price to Earnings (P/E)12.6
Beta (1Y)0.24
Revenue Growth-5.11%
EPS Growth13.03%
CountryUS
Employees3,575
SectorEnergy
Sector Strength52
IndustryCoal
Share Statistics
EPS (TTM)2.06
Shares Outstanding128,658,800
10 Day Avg. Volume198,461
30 Day Avg. Volume250,704
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)1.62
Price to Sales (P/S)1.36
P/FCF Ratio7.69
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$33.50Price Target Upside35.57% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.33
Revenue Forecast (FY)$2.22B
Alliance Resource Business Overview & Revenue Model
Company Description
Alliance Resource Partners, L.P. (ARLP) operates as a diversified natural resource enterprise, with a primary focus on extracting and supplying coal to utility companies and industrial customers across the United States. The company's business act...
How the Company Makes Money
ARLP makes money primarily by selling coal under contracts and spot sales to utilities and industrial customers. Revenue is generated based on tons shipped/delivered and contract pricing terms, which may include fixed pricing and/or pricing provis...
Alliance Resource Earnings Call Summary
Earnings Call Date:Jul 27, 2026
(Q2-2026)
| Next Earnings Date:Nov 02, 2026
Earnings Call Sentiment Positive
The call presented多 substantial operational and financial progress: revenue, net income and adjusted EBITDA all grew materially, coal volumes and segment profitability improved, Oil & Gas Royalties delivered record results, distributable cash flow and coverage strengthened, and the AllDale acquisition meaningfully scales royalties with expected accretion. Headwinds include lower average coal realizations, sequential declines in BOE volumes, a mark-to-market loss on Bitcoin, and additional borrowing to fund the acquisition; demand sensitivity to weather and gas prices remains a risk. On balance, the highlights materially outweigh the lowlights, supported by strong contracting, cost improvements and a conservative leverage profile.Positive Updates
Revenue and Profit Growth
Total revenues increased to $551.6 million; net income attributable to ARLP rose 33.9% year-over-year to $79.6 million ($0.61 per unit); adjusted EBITDA increased 14.7% year-over-year to $185.7 million.
Negative Updates
Lower Average Coal Realizations
Average coal sales price per ton declined to $54.87 (down 5.3% YoY and 2.7% sequentially) driven by roll-off of higher-priced legacy Tunnel Ridge contracts and mix shifts (lower Mettiki sales in Appalachia).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Profit Growth
Total revenues increased to $551.6 million; net income attributable to ARLP rose 33.9% year-over-year to $79.6 million ($0.61 per unit); adjusted EBITDA increased 14.7% year-over-year to $185.7 million.
Read all positive updates
Company Guidance
Alliance maintained 2026 guidance of 33.75–35.25 million tons of coal sales, a coal sales price of $54–$56/ton and total segment adjusted EBITDA expense of $37–$39/ton, saying it is essentially fully committed/priced at the midpoint; the company has 29.4 million tons committed/priced for 2027 and its marketing team booked 21.2 million tons of new commitments this quarter (18.5 million domestic, 2.7 million export). For Oil & Gas Royalties, full‑year volumes were increased to ~1.95–2.05 million barrels of oil, 10.0–10.5 million Mcf of gas and 1.1–1.2 million barrels of NGLs (reflecting the July 1 AllDale III/IV close), with an estimated $13–$15 million of net income attributable to noncontrolling interest; the AllDale deal involved $206.2 million paid by ARLP (implying a $410 million gross valuation) and ARLP now holds ~61% economic interest, funded with cash, revolver borrowings and a new $150 million 18‑month term loan at SOFR+175–225 bps. Management reiterated priorities to reduce leverage and preserve flexibility, noting quarter‑end debt of $590.2 million, cash of $111.2 million, total liquidity of $424 million and leverage ratios of 0.82x (total) and 0.67x (net) to trailing‑12‑month adjusted EBITDA, and said assumed commodity hedges from the acquisition are included in guidance.Alliance Resource Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.17B | 2.19B | 2.45B | 2.57B | 2.42B | 1.57B |
| Gross Profit | 613.22M | 468.42M | 507.48M | 751.49M | 741.20M | 289.36M |
| EBITDA | 650.79M | 675.19M | 702.17M | 948.52M | 956.14M | 483.47M |
| Net Income | 266.43M | 311.16M | 360.86M | 630.12M | 586.20M | 182.77M |
Balance Sheet | ||||||
| Total Assets | 2.94B | 2.85B | 2.92B | 2.79B | 2.73B | 2.16B |
| Cash, Cash Equivalents and Short-Term Investments | 111.19M | 71.21M | 136.96M | 59.81M | 296.02M | 122.40M |
| Total Debt | 590.87M | 479.96M | 486.80M | 350.82M | 434.31M | 450.66M |
| Total Liabilities | 1.16B | 993.57M | 1.06B | 929.83M | 1.02B | 933.34M |
| Stockholders Equity | 1.77B | 1.84B | 1.83B | 1.83B | 1.61B | 1.21B |
Cash Flow | ||||||
| Free Cash Flow | 103.25B | 387.86M | 374.39M | 362.08M | 515.96M | 272.20M |
| Operating Cash Flow | 153.47B | 651.14M | 803.13M | 830.64M | 802.35M | 426.14M |
| Investing Cash Flow | -50.28B | -331.25M | -440.66M | -559.73M | -403.34M | -143.63M |
| Financing Cash Flow | -211.98M | -385.73M | -285.32M | -507.12M | -225.39M | -215.69M |
Alliance Resource Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.34B | 12.60 | 14.82% | 9.71% | -5.11% | 13.03% | |
73 Outperform | $4.19B | 30.31 | 6.44% | 0.40% | 11.32% | 29.65% | |
71 Outperform | $1.30B | 11.36 | 18.84% | 3.18% | -15.69% | -18.53% | |
65 Neutral | $15.17B | 7.61 | 4.09% | 5.20% | 3.87% | -62.32% | |
55 Neutral | $2.60B | -14.18 | -3.37% | 1.32% | -0.68% | ― | |
53 Neutral | $1.74B | -45.57 | -2.47% | ― | -19.15% | -246.35% | |
48 Neutral | $568.30M | -8.19 | -13.44% | ― | -16.66% | -195120.00% |
* Energy Sector Average
ARLP
Alliance Resource
25.95
1.67
6.89%
NRP
Natural Resource PRN
98.06
-1.52
-1.53%
AMR
Alpha Metallurgical Resources
137.16
18.54
15.63%
METC
Ramaco Resources
9.17
-12.63
-57.94%
HCC
Warrior Met Coal
79.41
26.93
51.31%
BTU
Peabody Energy Comm
21.32
4.74
28.57%
Alliance Resource Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
Alliance Resource expands via new international supply agreement
Positive
Jul 8, 2026
On July 1, 2026, Alliance Resource Partners’ subsidiary Matrix Design Africa entered into a five-year Master Supply, Distribution and Services Agreement with Saminco Solutions LLC, covering non-exclusive distribution, product purchases, and ...
Business Operations and StrategyM&A TransactionsPrivate Placements and Financing
Alliance Resource expands mineral royalty footprint with acquisition
Positive
Jul 2, 2026
On July 1, 2026, Alliance Minerals, a wholly owned subsidiary of Alliance Resource Partners, L.P., completed a $206.2 million acquisition of remaining general and limited partner interests in AllDale Minerals III and IV, financed with cash, revolv...
Business Operations and StrategyM&A Transactions
Alliance Resource Expands Stake in AllDale Royalties
Positive
Jun 8, 2026
On June 5, 2026, Alliance Resource Partners agreed to acquire all remaining general and limited partner interests in AllDale Minerals III and IV that it and related parties do not already own, in a deal valued at about $206.2 million and implying ...
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.