Is Alpha Metallurgical Resources Still Attractive After a 28.8% Monthly Surge in 2025?

• Wondering if Alpha Metallurgical Resources at around $206 a share is still a value play or if the easy money has already been made? You are not alone, and that is exactly what we will dig into.
• The stock has climbed 11.5% over the last week and 28.8% over the past month, while longer term gains of 38.3% over 3 years and 1654.5% over 5 years make it look like a classic winner that might still have room to run.
• Recent moves have been driven largely by shifting expectations around met coal demand and supply discipline in the US, as investors reassess how sustainable Alpha's cash flows could be through the cycle. At the same time, ongoing debate over long term steel demand and decarbonization policies has kept volatility elevated, giving value focused investors more frequent entry and exit points.
• On our checks, Alpha Metallurgical Resources scores a 4 out of 6 valuation score, suggesting it still screens as undervalued on several key metrics. Next, we will walk through those methods step by step, before finishing with a more nuanced way to think about what this business might really be worth.

Find out why Alpha Metallurgical Resources's 2.5% return over the last year is lagging behind its peers.

Approach 1: Alpha Metallurgical Resources Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting the cash it can generate in the future and discounting those dollars back to today. For Alpha Metallurgical Resources, the model starts with last twelve months free cash flow of about $30.6 million and then layers on analyst estimates and longer term growth assumptions.

Analysts forecast free cash flow rising to roughly $193.2 million in 2026 and $233.4 million in 2027, with Simply Wall St extrapolating further increases to around $403.7 million by 2035 as the business matures. All of these future cash flows are discounted back using a required rate of return, and then combined with a terminal value to arrive at an estimated intrinsic value of $466.28 per share.

Compared with the current share price near $206, the DCF suggests Alpha Metallurgical Resources is trading at about a 55.7% discount to its estimated worth. This implies the market is heavily discounting the durability of those future cash flows.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Alpha Metallurgical Resources is undervalued by 55.7%. Track this in your watchlist or portfolio, or discover 917 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Alpha Metallurgical Resources.

Approach 2: Alpha Metallurgical Resources Price vs Sales

For companies like Alpha Metallurgical Resources where revenue is a key driver and earnings can swing with commodity cycles, the price to sales ratio is a useful way to judge valuation. It looks at how much investors are paying for each dollar of sales, which tends to be more stable than profits in volatile industries.

In general, higher growth and lower risk justify a higher sales multiple, while slower growth or greater uncertainty should pull that multiple down. Alpha currently trades on a price to sales ratio of about 1.19x, below both the Metals and Mining industry average of around 2.26x and the peer group average of roughly 1.74x. This suggests the market prices its revenue stream more cautiously than others.

Simply Wall St also applies a proprietary Fair Ratio model, which estimates what Alpha’s price to sales should be, given its growth profile, profitability, risk, industry and market cap. For Alpha, this Fair Ratio is 0.92x, a more tailored benchmark than simple peer or industry comparisons. Since the current 1.19x multiple is modestly above this Fair Ratio, the stock screens as slightly expensive on a sales basis.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1455 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Alpha Metallurgical Resources Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Alpha Metallurgical Resources with the numbers. Narratives turn your assumptions about its future revenue, earnings and margins into a forward looking forecast, a fair value estimate, and a clear buy or sell signal on Simply Wall St’s Community page. Narratives are continuously updated as new news or earnings arrive. One investor might build a bullish story that justifies a fair value near the top end of recent analyst targets at around $185 per share. Another, more cautious investor might create a bearish Narrative that only supports a value closer to the low end near $150. This can help each of them decide whether the current price looks attractive or stretched based on their own story driven view of the company.

Do you think there's more to the story for Alpha Metallurgical Resources? Head over to our Community to see what others are saying!

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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