How REX American Resources' (REX) Earnings Beat and Record Stock Price Have Changed Its Investment Story

• In recent days, REX American Resources reported second quarter earnings per share of US$0.43, surpassing analyst forecasts, while revenue for the quarter reached US$158.56 million, slightly below expectations.
• This earnings performance helped the company achieve a new all-time high stock price, highlighting positive investor sentiment and strong momentum following its transition to profitability.
• We'll now examine how REX American Resources' recent earnings beat and record stock price influence its investment outlook.

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REX American Resources Investment Narrative Recap

To be a shareholder in REX American Resources, you need to believe in the company's ability to maintain its profitability upswing while navigating competitive ethanol markets and regulatory hurdles. The recent earnings surprise and stock price record are encouraging, but revenue falling short of expectations does not materially impact the short-term catalyst of carbon capture project approval or the biggest risk around volatile selling prices and margin compression.

Among recent announcements, the company’s ongoing share buyback program, which has reduced over 10% of shares outstanding since 2021, stands out. This initiative helps boost earnings per share and underpins shareholder value, providing some cushion against periods when operational catalysts pause or risk factors intensify.

However, despite strong momentum, investors should also be aware that lower ethanol and co-product selling prices may compress gross margins and...

Read the full narrative on REX American Resources (it's free!)

REX American Resources' outlook projects $839.6 million in revenue and $50.0 million in earnings by 2028. This implies a 9.3% annual revenue growth rate but a decrease in earnings of $8.2 million from the current $58.2 million.

Uncover how REX American Resources' forecasts yield a $49.37 fair value, a 59% upside to its current price.

Exploring Other Perspectives

The Simply Wall St Community has shared two fair value estimates for REX American Resources, ranging from US$2.08 up to US$49.37. While participants hold widely differing views, those margins signal the material impact that changing ethanol prices could have on future performance.

Explore 2 other fair value estimates on REX American Resources - why the stock might be worth as much as 59% more than the current price!

Build Your Own REX American Resources Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• Our free REX American Resources research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate REX American Resources' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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