Value
8.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 8.8 |
| P/S | 9.3 |
| EV/EBITDA | 8.4 |
| Fwd P/E | 9.5 |
| PEG | 9.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 8.6x
- ▸PEG: 0.55
- ▸Attractively valued
ARLP · Why this verdict
Why Alliance Resource Partners (ARLP) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictBUY WAIT
Overall score6.4/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Alliance Resource Partners has a perfect 4-quarter beat streak and a forward P/E of 8.8x, but price is within 2.9% of the analyst target, RSI is 77, customers are 89% utilities and the high yield carries a safety warning.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The dividend carries a yield-trap warning with a dividend-safety score of 4.0, so the payout may not be sustainable if coal prices fall. Catalyst breakdown | Distribution coverage remains adequate and the payout is maintained. | ↓Deteriorating |
| CounterFour straight beats and strong margins suggest current distributions are well covered by earnings. | ||
ARLP beat estimates in all 4 recent quarters with an average surprise of 22.3%, including a 19% beat on the latest report. Earnings | The February 2027 report extends the streak to 5 beats. | ↓Deteriorating |
| CounterCoal earnings track commodity prices, so beats driven by price strength can reverse quickly when prices fall. | ||
The partnership is attractively valued at a forward P/E of 8.8x and a PEG of 0.55 with a Piotroski F-Score of 8/9. Valuation breakdown | Earnings hold so the low multiple supports the price. | ↑Improving |
| CounterThe sector modifier adds +1.2 to the score, so some of the apparent value reflects the energy tailwind rather than ARLP specifically. | ||
Only 2.9% upside remains to the analyst target against 8.4% downside, with RSI at 77 and falling OBV volume distribution. Warnings | A pullback resets RSI below 60 and reward-to-risk improves above 1.5. | ↑Improving |
| CounterPrice is above the 200-day average with a strong MACD, so strength can persist and analyst targets may rise. | ||
Domestic electric utilities account for 89.2% of customer revenue, leaving the business exposed to coal-burn policy and utility demand. Bear case | Customer mix stays contracted and utility volumes hold. | ↑Improving |
| CounterUtility customers on long-term contracts provide stable volume, so concentration brings revenue visibility as well as risk. | ||
The dividend carries a yield-trap warning with a dividend-safety score of 4.0, so the payout may not be sustainable if coal prices fall.
↓DeterioratingCatalyst breakdown
- Expectation
- Distribution coverage remains adequate and the payout is maintained.
CounterFour straight beats and strong margins suggest current distributions are well covered by earnings.
ARLP beat estimates in all 4 recent quarters with an average surprise of 22.3%, including a 19% beat on the latest report.
↓DeterioratingEarnings
- Expectation
- The February 2027 report extends the streak to 5 beats.
CounterCoal earnings track commodity prices, so beats driven by price strength can reverse quickly when prices fall.
The partnership is attractively valued at a forward P/E of 8.8x and a PEG of 0.55 with a Piotroski F-Score of 8/9.
↑ImprovingValuation breakdown
- Expectation
- Earnings hold so the low multiple supports the price.
CounterThe sector modifier adds +1.2 to the score, so some of the apparent value reflects the energy tailwind rather than ARLP specifically.
Only 2.9% upside remains to the analyst target against 8.4% downside, with RSI at 77 and falling OBV volume distribution.
↑ImprovingWarnings
- Expectation
- A pullback resets RSI below 60 and reward-to-risk improves above 1.5.
CounterPrice is above the 200-day average with a strong MACD, so strength can persist and analyst targets may rise.
Domestic electric utilities account for 89.2% of customer revenue, leaving the business exposed to coal-burn policy and utility demand.
↑ImprovingBear case
- Expectation
- Customer mix stays contracted and utility volumes hold.
CounterUtility customers on long-term contracts provide stable volume, so concentration brings revenue visibility as well as risk.
Per-dimension breakdown
Quality
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.5 |
| ROA | 5.2 |
| Gross margin | 3.4 |
| Op margin | 9.6 |
| Net margin | 7.0 |
| Current ratio | 5.1 |
| FCF quality | 6.3 |
| Moat | 6.2 |
| Piotroski F | 8.9 |
- ▸Strong Piotroski F-Score: 8/9
Growth
7.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.9 |
| EPS growth | 10.0 |
Momentum
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.1 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 4.3 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
8.1/10data confidence 100%| Component | Sub-score |
|---|---|
| news sentiment | 10.0 |
| Analyst rating | 6.8 |
| Price target | 8.1 |
- ▸Positive news sentiment (+1.00)
- ▸Light analyst coverage (3.0) — signal dampened
- ▸Analyst upside: 24%
Insider
5.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 8.0 |
| notable moves | 3.0 |
- ▸Negligible insider buying — $1,807 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 5.0 |
| growth rank | 2.5 |
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.7 |
| support resistance | 3.7 |
| 52w position | 8.6 |
Risk (lower is worse)
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 4.9 |
| volatility | 7.9 |
| put call | 10.0 |
| implied vol | 0.8 |
| beta | 10.0 |
| debt equity | 8.7 |
- ▸High IV: 75%
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.0 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (7)
- MOMENTUM:5.5>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:88d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.8<1.5@spot
Warning (1)
- MOMENTUM:5.5<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.81
Upside
+5.2%
Downside
6.4%
Sizing output
STARTER
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.4B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.5>=4.5. Top dim: Value at 8.6; weakest: Peer rank at 3.0. No conviction either direction.
The strongest dimensions are Value at 8.6, Sentiment at 8.1, and Risk (lower is worse) at 7.3; the weakest are Peer rank at 3.0, Technical at 5.3, and Insider at 5.3. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 0.81 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% in the next reported quarter.
- P2Cheap Valuation Solid Quality
Trip ifForward P/E rises above 14x from current 8.8x.
- P3Limited Upside Overbought
Trip ifPrice rises above the $27.48 analyst target, so upside falls below 0%.
- P4Utility Customer Concentration
Trip ifUtility customer share of revenue rises above 95% from current 89.2%.
- P5Yield Trap Warning
Trip ifDistribution is cut by more than 20% from the current rate.