One-glance verdict
Undervalued
$790.02 our estimate vs market $144.38
Wall Street consensus: $176.00 (-77.7% lower than our fair-value estimate)
82% below our estimate, below the bear case
Fundamentals snapshot
Alpha Metallurgical Resources, Inc.
AMR · NYQ · Basic Materials · Coking Coal
Current price
$144.38
52-week range
$133.64 - $253.82
Market cap
$1.83B
Balance sheet
Healthy
-20.33x Concerning
Net cash $327.08M. Interest coverage shows how many times profit covers the interest bill.
What stands out
1 Reward
2 Risks
1 rewards · 2 risks
- Reward Free cash flow was positive in 8/10 years.
- Risk Operating margin compressed from 38.5% to -2.9% over 3 years.
- Risk Return on equity was -3.0% last year — the company lost money on shareholders' equity.
What this company does
Alpha Metallurgical Resources, Inc.
Alpha Metallurgical Resources, Inc. is a company that digs up and sells coal, specifically the kind used to make steel (this is called met coal) and the kind used to create electricity (this is called thermal coal). The money they make primarily comes from selling this coal, and it matters because the price of coal directly impacts how much profit they can keep after paying their costs.
How the company got here
Alpha Metallurgical Resources, Inc. has a history rooted in the consolidation of coal assets. The company in its current form was established in 2016 as Contura Energy, emerging from the bankruptcy of Alpha Natural Resources. It officially adopted the Alpha Metallurgical Resources name in 2021 to better reflect its focus. The company's lineage traces back further through significant mergers and acquisitions, including the large takeover of Massey Energy in 2011. These moves have shaped Alpha Metallurgical Resources into a major player in the coal industry, with a strategic shift away from thermal coal towards metallurgical coal.
What it actually does
Alpha Metallurgical Resources mines, processes, and sells coal. The primary product is metallurgical coal, also known as 'met coal,' which is a crucial ingredient in the production of steel. While the company also produces some thermal coal, it's largely a byproduct of its main operations. Alpha operates numerous mines and coal preparation facilities, primarily located in Virginia and West Virginia, to extract and process these resources for sale to industrial customers worldwide.
Metallurgical Coal
This is the core business for Alpha Metallurgical Resources, accounting for the vast majority of its revenue. Metallurgical coal is a specific type of coal that, when heated in a furnace without air (a process called coking), transforms into coke. Coke is then used as a fuel and a reducing agent in blast furnaces to produce iron and steel. Alpha supplies various grades of metallurgical coal to steelmakers and coke producers both domestically and internationally. The company's operations, including its mines and preparation plants, are geared towards producing high-quality met coal that meets the stringent requirements of the steel industry.
Thermal Coal
While Alpha Metallurgical Resources' strategic focus is on metallurgical coal, it also produces and sells thermal coal. Thermal coal is primarily used as fuel to generate electricity in power plants. However, for Alpha, thermal coal is largely a byproduct of its met coal mining operations. The company has been strategically reducing its involvement in thermal coal production, as its market dynamics and future outlook differ significantly from that of met coal, which has fewer substitutes in its primary application.
What management is betting on now
Alpha Metallurgical Resources' management is focused on maximizing the value of its metallurgical coal business. This includes optimizing mining operations for efficiency and cost-effectiveness, managing reserves prudently, and maintaining financial discipline to ensure resilience through market cycles. A key part of their strategy involves returning capital to shareholders, particularly through share buybacks, which can increase earnings per share (EPS) – the portion of a company's profit allocated to each outstanding share of common stock. They are also leveraging their logistics capabilities, including their stake in Dominion Terminal Associates, to ensure reliable delivery to global customers.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$158.01M
FY2024 Q4
$13.58M
FY2025 Q1
$-16.27M
FY2025 Q2
$18.59M
FY2025 Q3
$25.44M
FY2025 Q4
$-9.99M
FY2026 Q1
$-11.62M
FY2026 Q2
$-5.28M
Revenue
$492.86M
Net income
$-12.25M
Diluted EPS
-0.96
Operating cash flow
$39.86M
Free cash flow
$-5.28M
Fetching…
Sources
Revenue
$524.99M
Net income
$-11.03M
Diluted EPS
-0.86
Operating cash flow
$29.05M
Free cash flow
$-11.62M
Fetching…
Sources
Revenue
$520.47M
Net income
$-17.27M
Diluted EPS
-1.35
Operating cash flow
$18.97M
Free cash flow
$-9.99M
Fetching…
Sources
Revenue
$526.78M
Net income
$-5.51M
Diluted EPS
-0.42
Operating cash flow
$50.55M
Free cash flow
$25.44M
Fetching…
Sources
Revenue
$550.27M
Net income
$-4.95M
Diluted EPS
-0.38
Operating cash flow
$53.23M
Free cash flow
$18.59M
Fetching…
Sources
Revenue
$531.96M
Net income
$-33.95M
Diluted EPS
-2.60
Operating cash flow
$22.18M
Free cash flow
$-16.27M
Fetching…
Sources
Revenue
$617.35M
Net income
$-2.13M
Diluted EPS
-0.09
Operating cash flow
$56.26M
Free cash flow
$13.58M
Fetching…
Sources
Revenue
$671.90M
Net income
$3.80M
Diluted EPS
0.29
Operating cash flow
$189.46M
Free cash flow
$158.01M
Fetching…
Sources
Is it cheap or expensive?
Fair value $790.02 vs current price $144.38
Wall Street consensus is the average analyst price target: $176.00 (-77.7% lower than our fair-value estimate).
Our most-likely fair value is $790.02 a share — about 447.2% above today's price of $144.38, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $327.1M - more cash than debt. Interest coverage -20.3x.
Net debt
$-327.08M
Interest coverage
-20.33x
Alpha Metallurgical Resources, Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
AMR
BASELINE
Alpha Metallurgical Resources, Inc.
Total debt $11.40M Interest coverage -20.33x This is the baseline the peer rows are being compared against.
Total debt $374.10M Interest coverage -0.13x Neither company has much profit cushion over interest right now.
Total debt $235.83M Interest coverage 4.69x This peer still has a real interest-payment cushion, while AMR does not.
Total debt $608.40M Interest coverage 1.62x This peer still has a real interest-payment cushion, while AMR does not.
What you should know
The case for and against AMR
1 Reward
2 Risks
Rewards
-
Free cash flow was positive in 8/10 years.
Risks
-
Operating margin compressed from 38.5% to -2.9% over 3 years.
-
Return on equity was -3.0% last year — the company lost money on shareholders' equity.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
8.18x
P/B
1.22x
P/S
0.89x
EV/EBITDA
11.89x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
10.0%
Operating margin
-2.9%
Net margin
-2.2%
ROE
-3.0%
ROA
-1.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.01x
Current ratio
3.40x
Quick ratio
2.25x
Total debt
$11.40M
Total cash
$338.48M
Growth
How the business has been compounding
Revenue TTM
$2.07B
Revenue 5Y CAGR
-1.5%
EPS TTM
-3.59
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$138.42M
Free CF TTM
$17.77M
FCF margin
0.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2023-11-30