One-glance verdict
Undervalued
$73.39 our estimate vs market $22.18
Wall Street consensus: $30.92 (-57.9% lower than our fair-value estimate)
70% below our estimate, below the bear case
Fundamentals snapshot
Peabody Energy Corporation
BTU · NYQ · Energy · Thermal Coal
Current price
$22.18
52-week range
$20.06 - $41.14
Market cap
$2.70B
Balance sheet
Healthy
-0.13x Concerning
Net cash $101.40M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 3.9% last year.
- Reward Free cash flow was positive in 7/10 years.
- Risk Operating margin compressed from 24.8% to -9.5% over 3 years.
- Risk Insider ownership is only 1.0% (peer median: 29.3%).
What this company does
Peabody Energy Corporation
Peabody Energy Corporation mines and sells coal, which is a rock burned to create electricity or used to make steel. Their money mainly comes from selling this coal, and it matters because the demand for coal, especially for electricity generation and steel production, directly impacts their profits and ability to operate.
How the company got here
Peabody Energy began in 1883 as a small coal delivery service in Chicago, founded by Francis Peabody and a partner. Initially, the company bought coal from existing mines to sell to local homes and businesses. By 1890, Francis Peabody bought out his partner, and the company was incorporated as Peabody Coal Company. A significant turning point came in 1895 when the company opened its first mine, marking its transition from a seller of coal to a producer. Over the decades, Peabody grew through mergers and acquisitions, expanding its operations across the United States and eventually into Australia. The company went public in 2001, becoming Peabody Energy Corporation, and has since navigated shifts in the energy market and environmental regulations.
What it actually does
Peabody Energy is a major producer of coal, a fossil fuel that is burned to generate electricity and used in the manufacturing of steel. The company mines this coal from various locations in the United States and Australia. Beyond mining, Peabody also engages in the marketing, brokerage, and trading of coal, connecting producers with buyers globally. Their customers include electric utilities, industrial facilities, and steel manufacturers who rely on coal for their operations.
Seaborne Metallurgical
This segment of Peabody Energy focuses on producing and selling metallurgical coal, which is a key ingredient in the steelmaking process. The coal is mined in Australia and primarily sold to customers in Asia and Europe. Metallurgical coal is distinct from thermal coal because of its specific properties required for high-temperature industrial processes like smelting iron ore into steel. This business line is a significant part of Peabody's strategy to capture demand in growing Asian markets.
Seaborne Thermal
This business line involves the mining and sale of thermal coal, which is mainly used for electricity generation. Peabody's thermal coal operations are largely based in Australia, and this segment is a major contributor to the company's overall revenue. The coal is exported to international markets, particularly in the Asia Pacific region, where there is strong demand from power plants. This segment is positioned to benefit from the ongoing need for reliable energy in developing economies.
Other U.S. Thermal
This segment encompasses Peabody's thermal coal operations located in various regions of the United States, excluding the Powder River Basin. These mines supply coal primarily to domestic electric utilities and industrial facilities. The coal produced here is used for power generation and other industrial processes. This part of the business aims to maximize cash generation by optimizing the lowest-cost and highest-margin U.S. thermal coal assets.
Powder River Basin
Peabody Energy's Powder River Basin segment is a significant producer of thermal coal located in Wyoming, United States. This coal is known for its lower sulfur content and is a key fuel source for electricity generation in the U.S. The company focuses on optimizing these low-cost operations to maximize cash generation. This segment serves domestic power and industrial customers, playing a crucial role in the U.S. energy supply chain.
What management is betting on now
Peabody Energy's management is strategically focused on rebalancing its investment portfolio to increase its access to seaborne thermal and metallurgical coal markets, particularly in Asia, which are experiencing higher growth. Simultaneously, they are optimizing their lowest-cost and highest-margin U.S. thermal coal assets to generate maximum cash. The company is also committed to operational excellence, safety, and financial strength, aiming to return value to shareholders while navigating the evolving energy landscape.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$-281.50M
FY2025 Q4
$-342.80M
Revenue
$1.00B
Net income
$-90.60M
Diluted EPS
-0.74
Operating cash flow
$-1.40M
Free cash flow
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Sources
Revenue
$973.30M
Net income
$-32.40M
Diluted EPS
-0.27
Operating cash flow
$30.00M
Free cash flow
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Sources
Revenue
$1.02B
Net income
—
Diluted EPS
0.11
Operating cash flow
$68.60M
Free cash flow
$-342.80M
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Sources
Revenue
$1.01B
Net income
$-70.10M
Diluted EPS
-0.58
Operating cash flow
$122.00M
Free cash flow
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Sources
Revenue
$890.10M
Net income
$-27.60M
Diluted EPS
-0.23
Operating cash flow
$23.20M
Free cash flow
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Sources
Revenue
$937.00M
Net income
$34.40M
Diluted EPS
0.27
Operating cash flow
$119.90M
Free cash flow
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Sources
Revenue
$1.12B
Net income
—
Diluted EPS
0.25
Operating cash flow
$119.80M
Free cash flow
$-281.50M
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Sources
Revenue
$1.09B
Net income
$101.30M
Diluted EPS
0.74
Operating cash flow
$359.90M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $73.39 vs current price $22.18
Wall Street consensus is the average analyst price target: $30.92 (-57.9% lower than our fair-value estimate).
Our most-likely fair value is $73.39 a share — about 230.9% above today's price of $22.18, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $101.4M - more cash than debt. Interest coverage -0.1x.
Net debt
$-101.40M
Interest coverage
-0.13x
Peabody Energy Corporation'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
BTU
BASELINE
Peabody Energy Corporation
Total debt $424.90M Interest coverage -0.13x This is the baseline the peer rows are being compared against.
Total debt $679.60M Interest coverage 9.70x This peer still has a real interest-payment cushion, while BTU does not.
Total debt $11.40M Interest coverage -20.33x 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 BTU does not.
What you should know
The case for and against BTU
3 Rewards
3 Risks
Rewards
-
Revenue grew 3.9% last year.
-
Free cash flow was positive in 7/10 years.
-
Dividend yield is 1.4% with 9-year payout history.
Risks
-
Operating margin compressed from 24.8% to -9.5% over 3 years.
-
Insider ownership is only 1.0% (peer median: 29.3%).
-
Return on equity was -4.8% 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)
—
Forward P/E
7.92x
P/B
0.83x
P/S
0.67x
EV/EBITDA
9.57x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
10.4%
Operating margin
-9.5%
Net margin
-4.6%
ROE
-4.8%
ROA
-1.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.13x
Current ratio
2.01x
Quick ratio
1.06x
Total debt
$424.90M
Total cash
$526.30M
Growth
How the business has been compounding
Revenue TTM
$4.01B
Revenue 5Y CAGR
3.9%
EPS TTM
-1.49
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$219.20M
Free CF TTM
$-77.70M
FCF margin
-1.9%
Dividend
Shareholder payout
Yield
1.4%
Payout ratio
28.6%
Last ex-div date
2026-08-12