Alliance Resource (ARLP) AI Stock Analysis

• Market Cap: $3.33B
• Dividend Yield: 10.77%
• Average Volume (3M): 279.00K
• Price to Earnings (P/E): 12.2
• Beta (1Y): 0.30
• Revenue Growth: -8.53%
• EPS Growth: -53.44%
• Country: US
• Employees: 3,653
• Sector: Energy
• Sector Strength: 68
• Industry: Coal
• EPS (TTM): 0.57
• Shares Outstanding: 128,428,020
• 10 Day Avg. Volume: 218,521
• 30 Day Avg. Volume: 279,004
• PEG Ratio: 0.02
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.11
• Enterprise Value/Market Cap: 0.82
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 2.82
• Enterprise Value/Ebitda: 0.94
• 1Y Price Target: $30.00
• Price Target Upside: 15.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 76 Outperform
• Price Target: $29.00 ▲(11.71%Upside)

Alliance Resource's stock is supported by strong financial performance and attractive valuation, offering potential income through dividends. However, technical signals are neutral, and the earnings call highlighted challenges such as decreased revenues and coal sales volumes. The final score reflects a balanced view of these factors.

Positive Factors

Analyst Recommendations

Analyst recommends a Buy rating for Alliance Resource Partners LP with an increased price target.

Market Conditions

Domestic market conditions remain favorable due to factors like higher natural gas prices and increased electricity demand forecasts.

Sales and Contracts

The company successfully contracted 17.7 million tons for 2025-2028 and is now 96% committed for 2025 even after increasing sales guidance.

Negative Factors

Earnings Report

Alliance Resource Partners (ARLP) reported 4Q adjusted EBITDA of $124M, falling short of the $179M consensus and our $184M estimate.

Financial Performance

4Q results for Alliance Resource Partners LP were below expectations.

Operational Challenges

The Appalachia segment faced challenges with higher-than-expected expenses and lower recoveries, affecting overall results.

Alliance Resource Business Overview & Revenue Model

Company Description

Alliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties. It produces a range of thermal and metallurgical coal with sulfur and heat contents. The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas producing regions primarily in the Permian, Anadarko, and Williston Basins. Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software. As of December 31, 2021, it had approximately 547.1 million tons of proven and probable coal mineral reserves, as well as 1.17 billion tons of measured, indicated, and inferred coal mineral resources in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.

How the Company Makes Money

Alliance Resource Partners generates revenue primarily through the mining, production, and sale of coal. The company supplies coal to major electric utilities and industrial users, with long-term supply contracts ensuring steady income streams. Additionally, ARLP benefits from its investments in oil and gas mineral interests, which provide supplemental income. The company strategically manages its operations to optimize production efficiency and cost-effectiveness, enhancing profitability. Key partnerships with utility companies and industrial clients, along with its extensive transportation infrastructure, contribute significantly to ARLP's earnings by ensuring consistent demand and efficient distribution of its coal products.

Alliance Resource Financial Statement Overview

Summary

Alliance Resource is performing well across all financial metrics, showcasing strong profitability, financial stability, and healthy cash flows. The company has managed to sustain growth in a volatile industry, with strong profit margins and equity management. The balance sheet is robust, although careful management of liabilities and consistent cash flow conversion will be important for continued success.

Income Statement

Alliance Resource demonstrates strong profitability with a high Gross Profit Margin of 99.83% and a solid Net Profit Margin of 13.68% for the TTM. The company has experienced consistent revenue growth, notably a significant increase from 2021 to 2024. However, the EBIT Margin has fluctuated, indicating some volatility in operational efficiency.

Balance Sheet

The company's Balance Sheet is robust, characterized by a high Equity Ratio of 71.63% and manageable Debt-to-Equity Ratio of 0.02. This indicates financial stability and a low risk of over-leverage. The Return on Equity is strong at 3.57%, reflecting efficient use of equity to generate profits. However, the presence of significant total liabilities requires monitoring.

Cash Flow

Alliance Resource shows healthy cash flows with a strong Operating Cash Flow to Net Income Ratio of 1.97 for TTM, indicating effective cash generation. The Free Cash Flow has grown consistently, though the Free Cash Flow to Net Income Ratio of 0.80 suggests potential room for improvement in converting income to free cash.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.34B	2.45B	2.57B	2.41B	1.57B	1.33B
	Gross Profit
965.88M	2.45B	751.49M	1.01B	289.36M	133.96M
	EBIT
328.11M	394.13M	672.40M	1.21B	-42.98M	-239.79M
	EBITDA
584.13M	627.01M	948.52M	934.16M	483.47M	234.02M
	Net Income Common Stockholders
276.78M	360.86M	630.12M	586.20M	182.77M	-129.05M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
81.31M	136.96M	59.81M	296.02M	122.40M	55.57M
	Total Assets
2.90B	2.92B	2.79B	1.05B	2.16B	2.17B
	Total Debt
482.01M	486.80M	350.82M	434.31M	450.66M	609.78M
	Net Debt
400.70M	349.84M	291.01M	138.28M	328.25M	554.20M
	Total Liabilities
824.35M	1.06B	929.83M	1.02B	933.34M	1.09B
	Stockholders Equity
2.08B	2.09B	1.83B	1.61B	1.21B	1.06B
Cash Flow		Free Cash Flow
59.19B	374.39M	451.30M	505.42M	302.22M	279.54M
	Operating Cash Flow
146.28B	803.13M	830.64M	791.81M	425.20M	400.64M
	Investing Cash Flow
-93.37B	-440.66M	-559.73M	-403.34M	-142.69M	-125.12M
	Financing Cash Flow
-108.58B	-285.32M	-507.12M	-214.85M	-215.69M	-256.43M

Alliance Resource Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.96
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARLP, the sentiment is Positive. The current price of 25.96 is below the 20-day moving average (MA) of 26.08, below the 50-day MA of 26.00, and above the 200-day MA of 25.02, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 48.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ARLP.

Alliance Resource Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARLP	76 Outperform	$3.33B	12.19	14.71%	10.77%	-8.53%	-53.44%
BTU	76 Outperform	$1.66B	5.11	10.33%	2.20%	-7.42%	-26.06%
CNR	72 Outperform	$3.89B	15.23	4.36%	0.54%	10.42%	-70.77%
NRP	70 Neutral	$1.26B	9.20	31.98%	3.16%	-19.21%	-30.92%
HCC	62 Neutral	$2.46B	23.27	5.20%	0.68%	-21.04%	-75.78%
Sector *	58 Neutral	$7.55B	3.49	-4.45%	10.15%	0.79%	-49.51%
AMR	53 Neutral	$1.47B	55.80	1.66%	0.36%	-23.34%	-95.18%

Alliance Resource Corporate Events

Alliance Resource Expands Board with Strategic Appointment

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.