Arch Resources, Inc.

ARCH

Bituminous Coal & Lignite Surface Mining

Mkt Cap

$3.137B

PE

9.74

Debt

$178.6M

Cash

$286.6M

EV

$3.029B

FCF

$446.6M

Market Cap

$3.137B

P/E Ratio

9.74

Debt

$178.6M

Cash

$286.6M

EV

$3.029B

FCF

$446.6M

Charts data: {"Earnings":[{"time":"2014-12-30","value":-558353000},{"time":"2015-12-30","value":-2913142000},{"time":"2017-12-30","value":238450000},{"time":"2018-12-30","value":312577000},{"time":"2019-12-30","value":233799000},{"time":"2020-12-30","value":-344615000},{"time":"2021-12-30","value":337573000},{"time":"2022-12-30","value":1330914000},{"time":"2023-12-30","value":464038000}],"Sales":[{"time":"2014-12-30","value":611917000},{"time":"2015-12-30","value":395323000},{"time":"2017-12-30","value":2324623000},{"time":"2018-12-30","value":2451787000},{"time":"2019-12-30","value":2294352000},{"time":"2020-12-30","value":1467592000},{"time":"2021-12-30","value":2208042000},{"time":"2022-12-30","value":3724593000},{"time":"2023-12-30","value":3145843000}],"Net Margins":[{"time":"2014-12-30","value":-0.9124652526404725},{"time":"2015-12-30","value":-7.369017234008646},{"time":"2017-12-30","value":0.10257577250160564},{"time":"2018-12-30","value":0.1274894597287611},{"time":"2019-12-30","value":0.10190197493671416},{"time":"2020-12-30","value":-0.23481662478399992},{"time":"2021-12-30","value":0.1528834143553429},{"time":"2022-12-30","value":0.357331391644671},{"time":"2023-12-30","value":0.14750831494133687}],"Assets":[{"time":"2014-12-30","value":8429723000},{"time":"2015-12-30","value":5106738000},{"time":"2017-12-30","value":1979632000},{"time":"2018-12-30","value":1887060000},{"time":"2019-12-30","value":1867756000},{"time":"2020-12-30","value":1722472000},{"time":"2021-12-30","value":2117160000},{"time":"2022-12-30","value":2433108000},{"time":"2023-12-30","value":2484173000}],"Stockholders Equity":[{"time":"2014-12-30","value":1668154000},{"time":"2015-12-30","value":-1244289000},{"time":"2017-12-30","value":665865000},{"time":"2018-12-30","value":704821000},{"time":"2019-12-30","value":640536000},{"time":"2020-12-30","value":283561000},{"time":"2021-12-30","value":683866000},{"time":"2022-12-30","value":1365580000},{"time":"2023-12-30","value":1479456000}],"ROE":[{"time":"2014-12-30","value":-0.33471310202775045},{"time":"2015-12-30","value":2.3412101207999108},{"time":"2017-12-30","value":0.3581056220104676},{"time":"2018-12-30","value":0.4434842321667487},{"time":"2019-12-30","value":0.3650052456068043},{"time":"2020-12-30","value":-1.2153116966014368},{"time":"2021-12-30","value":0.49362448198916165},{"time":"2022-12-30","value":0.9746144495379253},{"time":"2023-12-30","value":0.3136544784028724}],"ROA":[{"time":"2014-12-30","value":-0.017738542535739314},{"time":"2015-12-30","value":-0.5610358314838161},{"time":"2017-12-30","value":0.117393535768264},{"time":"2018-12-30","value":0.14792216463705446},{"time":"2019-12-30","value":0.1300330450015955},{"time":"2020-12-30","value":-0.19783427539025308},{"time":"2021-12-30","value":0.1623807364582743},{"time":"2022-12-30","value":0.4505550102995839},{"time":"2023-12-30","value":0.22202640476327534}]}

Arch Resources, Inc. produces and sells metallurgical products. As of December 31, 2022, 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; 306,263 acres of coal land in West Virginia; 81,450 acres of coal land in Wyoming; 234,087 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. The company sells its products to utility, industrial, and steel producers in the United States and internationally. Arch Resources, Inc. was incorporated in 1969 and is headquartered in St. Louis, Missouri.

Sector

10-Q
9/30/23
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12/31/22
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3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Arch Resources, Inc.

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$446.6M	$523.5M	$606.5M	$694.5M	$785.7M	$878.4M	$970M	$1.058B	$1.14B	$1.212B	$1.273B	$12.73B
DCF		$455.2M	$458.6M	$456.6M	$449.3M	$436.7M	$419.4M	$397.7M	$372.5M	$344.5M	$314.6M	$3.146B
Value	$7.251B

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 7.5%

Earnings Stability -29%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is high enough to offer a good protection on the profits in case of higher costs or higher interests. Furthermore higher margins reduce earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2014	12-2015	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-91%	-740%	10%	13%	10%	-23%	15%	36%	15%	11%
ROA	-1.8%	-56%	12%	15%	13%	-20%	16%	45%	22%	15%
ROE	-33%	230%	36%	44%	37%	-120%	49%	97%	31%	22%

What is the average Net Margin?

The average Net Margin over the past 5 years is +10.87%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +3.58%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +15.25%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +4.84%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +22.92%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +8.25%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2014	12-2015	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	-	-31.45	0.97	1.06	2.20	-2.63	-115.72	0.23	0.39	0.40
Debt Equity	3.09	-4.13	0.49	0.49	0.53	2.08	1.21	0.17	0.12	0.12
MIN
Graham Stability	-	-	-	-	-	-130%	100%	100%	100%	-130%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 0.40.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -3.50.

What is the Graham’s Stability?

Graham’s Stability measure stands at -1.32.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2015	12-2018	12-2020	12-2022	Trend
Revenue	34%	5.1%	29%	-16%	-22%
Net Income	-	8.2%	-	-65%	14%
Stockholders Equity	-	16%	73%	8.3%	15%
FCF	-	7.3%	-	-56%	-7.6%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +5.11%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is -22.05%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is +8.22%.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +14.04%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +15.99%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is +15.31%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +7.32%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is -7.57%.