Ramaco Resources (METC, Financial) reported its first-quarter revenue at $134.7 million, down from $172.7 million in the same period last year. Despite the challenging conditions faced by its core metallurgical coal business, the company is making strides in its emerging rare earth and critical mineral ventures. The first quarter of 2025 has been marked by a decrease in metallurgical coal prices in both the U.S. and Australia, a trend driven by excess steel production in China and its sale below market value globally. This situation has led to reduced global steel production and lower prices for metallurgical coal. As a result, no public company in the industry witnessed robust outcomes in their met coal operations during this quarter. Nevertheless, Ramaco Resources remains on a path of operational improvement and sales success, showcasing resilience amid market fluctuations.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Ramaco Resources Inc (METC, Financial) is $13.83 with a high estimate of $18.00 and a low estimate of $9.50. The average target implies an upside of 53.87% from the current price of $8.99. More detailed estimate data can be found on the Ramaco Resources Inc (METC) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Ramaco Resources Inc's (METC, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Ramaco Resources Inc (METC, Financial) in one year is $12.77, suggesting a upside of 42.05% from the current price of $8.99. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Ramaco Resources Inc (METC) Summary page.
METC Key Business Developments
Release Date: March 11, 2025
- Record Tons Sold: Achieved record tons sold in Q4 2024.
- Cash Cost: Exited the year with cash cost well under $100 per ton.
- Liquidity: Ended the year with record liquidity of approximately $140 million.
- Margins: Q4 margins remained at $33 per ton, despite a $30 drop in met coal prices.
- Adjusted EBITDA: Q4 2024 adjusted EBITDA was $29 million, up from $24 million in Q3.
- Net Income: Q4 net income of $4 million compared to breakeven in Q3.
- Class A EPS: $0.06 gain in Q4 versus a $0.03 loss in Q3.
- Tons Sold: Exited the year at a 4.5 million ton per annum run rate.
- Liquidity at Year-End: $138 million, up more than 50% year-on-year.
- Net Debt to Adjusted EBITDA: 0.5 times on a trailing 12-month basis.
- 2025 Sales Commitment: 3.5 million tons committed for sale, with 1.6 million tons to North American customers at $152 per ton and 1.9 million tons to the seaborne market.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ramaco Resources Inc (METC, Financial) achieved record tons sold in Q4 2024, marking the strongest quarter of the year both financially and operationally.
- The company maintained cash costs well under $100 per ton, contributing to strong cash margins of $33 per ton despite a $30 drop in met coal prices.
- Ramaco Resources Inc (METC) ended the year with record levels of liquidity, approximately $140 million, providing a strong financial position.
- The company is advancing its rare earth and critical minerals project in Wyoming, with plans to begin full-scale mining in July and construct a pilot processing facility in the fall.
- Ramaco Resources Inc (METC) has a strategic plan to increase future production by adding 2 million tons of low-vol production, positioning itself for growth when market conditions improve.
Negative Points
- The met coal market faced continued pricing headwinds, with a year-long negative pricing environment impacting financial performance.
- Global steel demand remains weak, with Chinese steel exports pressuring global steel mill profits and affecting met coal prices.
- The company experienced operational challenges due to extreme weather events in Q1 2025, including freezing temperatures and historic flooding, impacting costs and production.
- There is uncertainty in the market, leading to a cautious approach in committing new capital to growth projects until pricing stabilizes.
- The rare earth project faces delays due to backlog in receiving third-party chemistry and metallurgic test results, impacting the timeline for economic and CapEx estimates.
