REX Reports Rising Sales and Falling Profits Might Change The Case For Investing In REX (REX)

• REX American Resources reported its earnings for the second quarter and first half of 2025, showing sales growth to US$158.56 million for the quarter but a decrease in net income to US$7.11 million compared to the previous year.
• While sales rose year-over-year, the drop in earnings per share highlights margin pressures and potential headwinds facing the company.
• We’ll explore how increased sales but pressured profitability in REX's results may influence the company's previously outlined investment narrative.

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REX American Resources Investment Narrative Recap

REX American Resources appeals to shareholders who see value in its potential to deliver long-term returns through expanding ethanol production, carbon capture projects, and operational improvements. The recent news of higher quarterly sales, but lower net income and earnings per share, draws attention to margin pressures but does not materially alter the most important short-term catalyst, the progress of the carbon capture and sequestration project. The main near-term risk remains sensitivity to margin compression due to fluctuating selling prices and costs.

Among REX’s recent announcements, the two-for-one stock split is the most relevant in the context of these results. This move increases liquidity and widens potential investor access, even as underlying profitability faces pressure. The interplay between share structure changes and the long-term catalysts, such as federal carbon tax credits, will be closely watched as REX pursues its growth projects.

Yet, beneath these headlines, investors should keep an eye on margin compression due to lower selling prices and higher input costs...

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

REX American Resources' narrative projects $839.6 million in revenue and $50.0 million in earnings by 2028. This requires 9.3% yearly revenue growth and a $8.2 million decrease in earnings from $58.2 million today.

Uncover how REX American Resources' forecasts yield a $49.37 fair value, a 20% downside to its current price.

Exploring Other Perspectives

Private fair value estimates for REX American Resources from two Simply Wall St Community members range widely from US$4.14 to US$49.37 per share. As sales rise and profitability tightens, margin pressure remains a central topic shaping community conversations about future company performance.

Explore 2 other fair value estimates on REX American Resources - why the stock might be worth as much as $49.37!

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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