Arch Resources (NYSE:ARCH) - Share price, News & Analysis

ARCH fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	1/6
Past Performance	3/6
Financial Health	6/6
Dividends	4/6

ARCH Stock Overview

Arch Resources, Inc. produces and sells thermal and metallurgical coal from surface and underground mines.

Rewards

Trading at 48.7% below our estimate of its fair value

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 54.5% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record

Significant insider selling over the past 3 months

Arch Resources Competitors

Peabody Energy

NYSE:BTU

US$3.6b

Alliance Resource Partners

NasdaqGS:ARLP

US$2.5b

CONSOL Energy

NYSE:CEIX

US$1.8b

Natural Resource Partners

NYSE:NRP

US$622.8m

Price History & Performance

Summary of all time highs, changes and price drops for Arch Resources
Historical stock prices
Current Share Price	US$169.29
52 Week High	US$183.53
52 Week Low	US$49.55
Beta	0.64
1 Month Change	28.91%
3 Month Change	48.54%
1 Year Change	210.68%
3 Year Change	92.84%
5 Year Change	139.21%
Change since IPO	168.71%

Recent News & Updates

May 20

Arch Resources: King Coal Back With A Potentially Massive 20%+ Yield

Arch Resources benefits immensely from the current global energy shortage. This saw their operating cash flow during the first quarter of 2022 already surpass the entirety of 2021. As a result of their variable dividend policy, they have declared a record large dividend that few investors would have ever thought possible even one year ago. Whilst this could potentially see a massive 20%+ dividend yield during 2022, they are reliant upon thermal coal, which still faces a secular decline in the long-term. Since their ability to fund dividends outside of these booming operating conditions is limited, I only believe that a hold rating is appropriate.

May 03

Is There An Opportunity With Arch Resources, Inc.'s (NYSE:ARCH) 49% Undervaluation?

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Arch Resources, Inc...

Apr 28

Arch Resources: Riding Winners Isn't Easy But Sometimes Worth It

Arch Resources reported another quarter of record earnings. The shares have appreciated over 200% in the last 12 months. Commodities are one of the few things that are performing well this year. There are reasons to believe these record earnings will be blown out over the next quarters.

Shareholder Returns

	ARCH	US Oil and Gas	US Market
7D	5.7%	5.5%	1.0%
1Y	210.7%	60.5%	-15.1%

Return vs Industry: ARCH exceeded the US Oil and Gas industry which returned 58.6% over the past year.

Return vs Market: ARCH exceeded the US Market which returned -13.2% over the past year.

Price Volatility

Is ARCH's price volatile compared to industry and market?
ARCH volatility
ARCH Average Weekly Movement	11.8%
Oil and Gas Industry Average Movement	8.3%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: ARCH is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 12% a week.

Volatility Over Time: ARCH's weekly volatility (12%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1969	3,303	Paul Lang	https://www.archrsc.com

Arch Resources, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. As of December 31, 2021, the company operated seven active mines. It also owned or controlled primarily through long-term leases approximately 28,292 acres of coal land in Ohio; 952 acres of coal land in Maryland; 10,095 acres of coal land in Virginia; 306,033 acres of coal land in West Virginia; 81,470 acres of coal land in Wyoming; 234,543 acres of coal land in Illinois; 33,047 acres of coal land in Kentucky; 362 acres of coal land in Montana; 248 acres of coal land in Pennsylvania; and 19,018 acres of coal land in Colorado, as well as smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas.

Arch Resources Fundamentals Summary

How do Arch Resources's earnings and revenue compare to its market cap?
ARCH fundamental statistics
Market Cap	US$2.62b
Earnings (TTM)	US$615.49m
Revenue (TTM)	US$2.68b

4.3x

P/E Ratio

1.0x

P/S Ratio

Is ARCH overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
ARCH income statement (TTM)
Revenue	US$2.68b
Cost of Revenue	US$1.74b
Gross Profit	US$940.28m
Other Expenses	US$324.79m
Earnings	US$615.49m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	39.77
Gross Margin	35.04%
Net Profit Margin	22.93%
Debt/Equity Ratio	34.1%

How did ARCH perform over the long term?

See historical performance and comparison

Dividends

5.2%

Current Dividend Yield

1%

Payout Ratio

Does ARCH pay a reliable dividends?

See ARCH dividend history and benchmarks

When do you need to buy ARCH by to receive an upcoming dividend?
Arch Resources dividend dates
Ex Dividend Date	May 27 2022
Dividend Pay Date	Jun 15 2022
Days until Ex dividend	0 days
Days until Dividend pay date	19 days

Does ARCH pay a reliable dividends?

See ARCH dividend history and benchmarks

Valuation

Is Arch Resources undervalued compared to its fair value and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

48.7%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: ARCH ($169.29) is trading below our estimate of fair value ($329.87)

Significantly Below Fair Value: ARCH is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: ARCH is good value based on its Price-To-Earnings Ratio (4.3x) compared to the US Oil and Gas industry average (13.6x).

PE vs Market: ARCH is good value based on its Price-To-Earnings Ratio (4.3x) compared to the US market (14.9x).

Price to Earnings Growth Ratio

PEG Ratio: ARCH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

Price to Book Ratio

PB vs Industry: ARCH is overvalued based on its Price-To-Book Ratio (2.8x) compared to the US Oil and Gas industry average (2x).

Future Growth

How is Arch Resources forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-54.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCH's earnings are forecast to decline over the next 3 years (-54.5% per year).

Earnings vs Market: ARCH's earnings are forecast to decline over the next 3 years (-54.5% per year).

High Growth Earnings: ARCH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ARCH's revenue is expected to decline over the next 3 years (-20.8% per year).

High Growth Revenue: ARCH's revenue is forecast to decline over the next 3 years (-20.8% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: ARCH's Return on Equity is forecast to be high in 3 years time (34.5%)

Past Performance

How has Arch Resources performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-28.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: ARCH has a high level of non-cash earnings.

Growing Profit Margin: ARCH became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: ARCH has become profitable over the past 5 years, growing earnings by -28.4% per year.

Accelerating Growth: ARCH has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: ARCH has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (88.4%).

Return on Equity

High ROE: ARCH's Return on Equity (66.6%) is considered outstanding.

Financial Health

How is Arch Resources's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: ARCH's short term assets ($907.0M) exceed its short term liabilities ($509.1M).

Long Term Liabilities: ARCH's short term assets ($907.0M) exceed its long term liabilities ($717.5M).

Debt to Equity History and Analysis

Debt Level: ARCH has more cash than its total debt.

Reducing Debt: ARCH's debt to equity ratio has reduced from 40.7% to 34.1% over the past 5 years.

Debt Coverage: ARCH's debt is well covered by operating cash flow (166.7%).

Interest Coverage: ARCH's interest payments on its debt are well covered by EBIT (25.8x coverage).

Balance Sheet

Dividend

What is Arch Resources's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

5.23%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: ARCH's dividend (5.23%) is higher than the bottom 25% of dividend payers in the US market (1.57%).

High Dividend: ARCH's dividend (5.23%) is in the top 25% of dividend payers in the US market (4.06%)

Stability and Growth of Payments

Stable Dividend: ARCH has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: ARCH's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (1.2%), ARCH's dividend payments are thoroughly covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (41.1%), ARCH's dividend payments are well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

3.3yrs

Average management tenure

CEO

Paul Lang (60 yo)

7.08yrs

Tenure

US$9,299,065

Compensation

Mr. Paul A. Lang has been a Director of Arch Resources, Inc. since February 27, 2020 and has been its Chief Executive Officer since April 30, 2020. He has been the President of Arch Resources, Inc. since A...

CEO Compensation Analysis

Compensation vs Market: Paul's total compensation ($USD9.30M) is above average for companies of similar size in the US market ($USD6.91M).

Compensation vs Earnings: Paul's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: ARCH's management team is considered experienced (3.3 years average tenure).

Board Members

Experienced Board: ARCH's board of directors are considered experienced (5.6 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: ARCH insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/25 00:00
End of Day Share Price	2022/05/25 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31