Value
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.4 |
| P/S | 8.2 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 8.2 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 14.4x
- ▸PEG: 0.07
HCC · Why this verdict
Why Warrior Met Coal (HCC) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A steelmaking coal producer with exceptional 54% year-over-year growth and favorable price geometry to a near-term resistance level is undermined by severely negative free cash flow, weak momentum, two recent consecutive earnings misses, and concentrated exposure to five customers and a single commodity — a combination that argues for holding rather than adding at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With five customers accounting for 56% of revenue and the entire business exposed to a single commodity — steelmaking coal — any disruption from a key customer or a sustained downturn in steel production would disproportionately impair the company's revenue base. Risk breakdown | Revenue from the five largest customers falls below 40% of total revenue, indicating diversification is underway and the single-customer tail risk is shrinking. | ↓Deteriorating |
| CounterHigh customer concentration can also reflect deep, long-term relationships with strategic buyers of steelmaking coal; if those relationships hold through the cycle, the concentration risk may not translate into revenue volatility in practice. | ||
Momentum sits well below the minimum passing threshold and the analyst consensus target has already been reached, meaning the stock carries no identifiable near-term price catalyst and the reward-to-risk ratio is negative at spot — making a new long position inadvisable without a clear technical reversal. Engine gate (failed) | MACD histogram turns positive for 3 consecutive weeks and price closes above $108 (near-term resistance), signaling a momentum recovery that changes the entry calculus. | →Stable |
| CounterA recent analyst mention has boosted news sentiment to a positive reading, and options market put-to-call positioning near 0.5 suggests the options market is not deeply pessimistic; a formal analyst catalyst could drive a momentum recovery faster than the moving averages would indicate. | ||
The company posted year-over-year revenue and earnings growth of 54%, a standout rate that reflects strong steelmaking coal demand and positions the business as one of the fastest-growing names in the basic materials sector. Growth breakdown | Revenue growth remains above 20% year-over-year for 2 consecutive quarters, demonstrating the current growth rate is not a single-quarter anomaly. | →Stable |
| CounterTwo of the most recent four quarters missed consensus estimates, including misses of 25% and 4.5% in the two most recent periods — indicating management lacks reliable near-term earnings visibility, which in a commodity business often signals a cycle peak. | ||
Free cash flow is negative at 127% of net income, meaning the business is consuming substantially more cash than it reports as profit — a red flag that calls into question the sustainability of the earnings stream and limits the reliability of reported profitability as a valuation anchor. Quality breakdown | Free cash flow turns positive relative to net income for 2 consecutive quarters, demonstrating the cash-conversion problem is resolving. | →Stable |
| CounterIn capital-intensive mining businesses, a sharply negative free cash flow relative to net income can reflect a concentrated capital expenditure cycle rather than structural impairment; if the investment phase concludes, free cash flow should recover in subsequent quarters. | ||
With five customers accounting for 56% of revenue and the entire business exposed to a single commodity — steelmaking coal — any disruption from a key customer or a sustained downturn in steel production would disproportionately impair the company's revenue base.
↓DeterioratingRisk breakdown
- Expectation
- Revenue from the five largest customers falls below 40% of total revenue, indicating diversification is underway and the single-customer tail risk is shrinking.
CounterHigh customer concentration can also reflect deep, long-term relationships with strategic buyers of steelmaking coal; if those relationships hold through the cycle, the concentration risk may not translate into revenue volatility in practice.
Momentum sits well below the minimum passing threshold and the analyst consensus target has already been reached, meaning the stock carries no identifiable near-term price catalyst and the reward-to-risk ratio is negative at spot — making a new long position inadvisable without a clear technical reversal.
→StableEngine gate (failed)
- Expectation
- MACD histogram turns positive for 3 consecutive weeks and price closes above $108 (near-term resistance), signaling a momentum recovery that changes the entry calculus.
CounterA recent analyst mention has boosted news sentiment to a positive reading, and options market put-to-call positioning near 0.5 suggests the options market is not deeply pessimistic; a formal analyst catalyst could drive a momentum recovery faster than the moving averages would indicate.
The company posted year-over-year revenue and earnings growth of 54%, a standout rate that reflects strong steelmaking coal demand and positions the business as one of the fastest-growing names in the basic materials sector.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 20% year-over-year for 2 consecutive quarters, demonstrating the current growth rate is not a single-quarter anomaly.
CounterTwo of the most recent four quarters missed consensus estimates, including misses of 25% and 4.5% in the two most recent periods — indicating management lacks reliable near-term earnings visibility, which in a commodity business often signals a cycle peak.
Free cash flow is negative at 127% of net income, meaning the business is consuming substantially more cash than it reports as profit — a red flag that calls into question the sustainability of the earnings stream and limits the reliability of reported profitability as a valuation anchor.
→StableQuality breakdown
- Expectation
- Free cash flow turns positive relative to net income for 2 consecutive quarters, demonstrating the cash-conversion problem is resolving.
CounterIn capital-intensive mining businesses, a sharply negative free cash flow relative to net income can reflect a concentrated capital expenditure cycle rather than structural impairment; if the investment phase concludes, free cash flow should recover in subsequent quarters.
Per-dimension breakdown
Quality
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 3.4 |
| Gross margin | 2.1 |
| Op margin | 7.4 |
| Net margin | 6.5 |
| Current ratio | 9.1 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 10.0 |
- ▸Earnings quality RED FLAG: -24% FCF/NI
- ▸Strong Piotroski F-Score: 9/9
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 71% YoY
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 1.8 |
- ▸Overbought (RSI 80)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.6 |
| Price target | 5.7 |
| erm sentiment | 5.9 |
- ▸Light analyst coverage (6.0) — signal dampened
Insider
7.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 9.7 |
| notable moves | 7.0 |
- ▸Modest insider selling — $2,200,000 (0.042% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 8.0 |
| growth rank | 8.0 |
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.7 |
| support resistance | 0.7 |
| 52w position | 7.8 |
| gap | 5.0 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.1 |
| days to cover | 3.6 |
| volatility | 1.5 |
| put call | 10.0 |
| implied vol | 3.6 |
| beta | 9.1 |
| debt equity | 9.6 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.3 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:7.0>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:81d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.6=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.60
Upside
-9.0%
Downside
15.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
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:7.0>=5.5. Top dim: Growth at 10.0; weakest: Technical at 3.5. No conviction either direction.
The strongest dimensions are Growth at 10.0, Insider at 7.1, and Momentum at 7.0; the weakest are Technical at 3.5, Quality at 5.4, and Catalyst at 5.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.60 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Exceptional 54pct Revenue Growth
Trip ifRevenue growth falls below 20% year-over-year for 2 consecutive quarters from the current 54% rate.
- P2Fcf Deeply Negative Quality Flag
Trip ifFree cash flow rises above $0 relative to net income — the FCF-to-net-income ratio exceeds 0% — for 2 consecutive quarters, resolving the cash-conversion red flag.
- P3Momentum Failure No Entry Edge
Trip ifMACD histogram turns positive for 3 consecutive weeks and price closes above $108 for 2 consecutive weeks, confirming a momentum reversal.
- P4Concentrated Commodity Customer Risk
Trip ifTop 5 customer concentration falls below 40% of total revenue from the reported 56%.