Breaking Down Arch Resources, Inc. (ARCH) Financial Health: Key Insights for Investors

You're looking at Arch Resources, Inc. right now and seeing a company on the cusp of a major operational pivot, which is defintely the right time to analyze the financials. After a challenging 2024, the market is pricing in a significant rebound, driven by the expected Q1 2025 merger with CONSOL Energy, which analysts project will unlock annual operational synergies between $110 million and $140 million. Look at the near-term numbers: for the fourth quarter of 2025 alone, the average analyst estimate projects Revenue to hit approximately $587.7 million and Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) to reach about $98.06 million, reflecting the anticipated improvements from the Leer and Leer South mines finally moving past their geological challenges. The consensus is a 'Strong Buy' with a 12-month price target around $168.30, so the question isn't just if they'll improve, but whether the market is fully appreciating the value of their metallurgical coal segment against the backdrop of global steel demand.

Revenue Analysis

You need to know where Arch Resources, Inc.'s revenue is coming from right now, especially after the big structural changes in 2025. The direct takeaway is that while the company still moves a lot of thermal coal volume, its financial health and value are overwhelmingly tied to the volatile, but high-margin, Metallurgical (Met) Coal segment.

The company's core revenue streams are simple: Metallurgical Coal (coking coal, used for steel production) and Thermal Coal (steam coal, used for electricity generation). For the trailing twelve months (TTM) leading up to November 2025, the total revenue figure stands at approximately $2.68 Billion. This is a significant decline, representing a -17.03% drop in TTM revenue year-over-year. Honestly, that kind of revenue contraction demands attention, but it hides a strategic pivot.

Segment Contribution and the Met Coal Anchor

The most important thing to understand is the profit split, not just the sales volume. Arch Resources, Inc. is defintely a metallurgical coal story now. While thermal coal volumes are high, the segment's profitability is shrinking due to market pressures like cheap natural gas and a long-term decline in US coal consumption.

Here's the quick math on where the value is generated:

• Metallurgical Coal: This segment contributes an estimated 80% to 90% of the company's adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). This is the financial anchor.
• Thermal Coal: This segment's margins are under pressure, especially in the Powder River Basin (PRB) assets. Management's long-term internal view is that PRB consumption will continue to drop by 5% to 10% annually.

The company's strategy is clear: manage the decline of the thermal segment while maximizing the high-margin met coal business. That's why they are confident in achieving their full-year coking coal sales target for 2025.

The 2025 Revenue Shift: Merger and Geographic Focus

The biggest change impacting the 2025 fiscal year is the successful completion of the merger with CONSOL Energy in January 2025, which created a new entity, Core Natural Resources. This merger fundamentally changes the scale and scope of the combined company's revenue base and cost structure, though the underlying Arch assets still drive the segment performance we are analyzing.

In terms of where the coal is sold, the focus is shifting away from the domestic US market, which accounted for only 43% of revenue in 2023. The push is to the export market, which is now dominated by Asia. Management is actively targeting the Asian market to account for 50% of export sales 'in relatively short order,' up from about 30% in 2023.

The near-term risk remains the volatility of global met coal prices, but the opportunity is in the cost-advantaged position of their flagship Leer and Leer South longwall operations. For a deeper dive into the company's valuation, check out Breaking Down Arch Resources, Inc. (ARCH) Financial Health: Key Insights for Investors.

Profitability Metrics

You're looking at Arch Resources, Inc. (ARCH) and trying to figure out if the combined company, Core Natural Resources, Inc. (formed in January 2025), is a solid investment. The short answer is that while the bottom line showed a loss in Q2 2025, the core operational efficiency (Adjusted EBITDA) is strong, and the merger synergies are driving a positive outlook for the full year.

The key to understanding profitability here is recognizing that the company is now a post-merger entity. The financial results for the first half of 2025 reflect the combined operations of the former Arch Resources, Inc. and CONSOL Energy Inc. (now Core Natural Resources, Inc., ticker CNR). This period was challenging, including a longwall outage at the Leer South mine, but the operational metrics still point to underlying strength.

Here's the quick math on the second quarter of 2025 (Q2 2025) for the combined entity:

The Net Loss of $36.6 million for Q2 2025, resulting in a negative net profit margin of -3.32%, is defintely a headline risk. But, you need to look past the statutory net loss. The Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) margin of 13.09% is a better indicator of the core cash-generating power of the mining operations, especially since the net loss included non-cash items and costs related to the Leer South fire and idle mine expenses.

In terms of trends, the company is projecting a full-year 2025 revenue of $4.12 billion and an Earnings Per Share (EPS) of $5.56. This suggests a significant rebound in the second half of the year as the operational issues resolve and merger synergies kick in. Management has already increased the merger-related annual synergy target to between $150 million and $170 million, up from earlier guidance, which directly boosts future profitability.

When you compare this to the broader industry, the picture is mixed. The average EBITDA margin for the top 40 global mining companies (excluding gold) was around 22% in 2024. The combined entity's Q2 2025 Adjusted EBITDA margin of 13.09% is clearly lagging that average, largely due to the temporary operational constraints like the Leer South longwall outage. However, their focus on high-quality metallurgical coal, which generates much better margins than thermal coal, is a structural advantage. You can read more about their strategic focus here: Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH).

Operational efficiency is improving, even with the short-term hiccups. The management expects a strong step-up in performance as they transition to lower-cost reserves and realize the full benefits of the merger. They're putting their cash to work, too, returning $194 million to shareholders in the first half of 2025 via buybacks and dividends, which is over 100% of their free cash flow during that period. That's a strong signal of management's confidence in future cash generation.

• Monitor the Leer South longwall restart, expected to improve margins.
• Watch for synergy realization, targeted at up to $170 million annually.
• Expect the net profit margin to turn positive in H2 2025 to meet the full-year EPS forecast.

Next step: Check the Q3 2025 earnings report (expected in November 2025) for the first signs of this projected H2 profit rebound.

Debt vs. Equity Structure

The financial health of Arch Resources, Inc. (ARCH) in 2025 is fundamentally defined by its merger with Consol Energy to form Core Natural Resources, Inc. in January 2025. This combination created a highly de-leveraged entity, continuing ARCH's pre-merger strategy of prioritizing debt reduction and shareholder returns.

For investors, the key takeaway is that the new structure maintains a conservative balance sheet, relying heavily on equity and operational cash flow rather than debt for growth. This is a massive advantage in the cyclical coal industry. The combined entity's total debt load, including the current portion, stood at approximately $370.6 million as of June 30, 2025. This figure is composed of $313.2 million in Total Long-Term Debt and $57.3 million as the Current Portion of Long-Term Debt. That's a very clean balance sheet.

A Low-Leverage Benchmark in a Capital-Intensive Industry

Arch Resources' legacy of financial discipline is clearly reflected in the new entity's leverage profile. The debt-to-equity (D/E) ratio is a crucial gauge of how much a company relies on borrowing versus shareholder funding (equity). A lower ratio signals less risk.

Here's the quick math: Using the latest reported debt figures and the approximate equity for the combined entity, the resulting Debt-to-Equity ratio is exceptionally low. The D/E ratio for Core Natural Resources is approximately 0.24 (calculated as $370.6 million in debt against roughly $1,568 million in equity). This is defintely a strong position.

To be fair, the industry average for Coal & Consumable Fuels sits around 0.2865 in early 2025. This means the new Core Natural Resources entity is operating with a significantly lower debt burden than its peers, giving it flexibility for capital returns or strategic investments.

Managing 2025's Near-Term Debt Maturities

The merger immediately put the combined balance sheet to work managing critical near-term maturities inherited from Arch Resources. Two significant debt obligations were due in 2025, which the new entity had to address:

• Convertible Senior Notes: The remaining $30.0 million of the 5.25% convertible senior notes were due on November 15, 2025. The majority of this debt was already retired in 2022, but the final portion required a plan.
• Tax-Exempt Bonds: A $45.0 million series of tax-exempt bonds, originally used to fund the Leer South mine, was subject to a mandatory tender for purchase on July 1, 2025.

The low leverage and strong liquidity-Core Natural Resources reported $413 million in cash and cash equivalents as of June 30, 2025-show a clear capacity to handle these maturities without strain. This is the benefit of a conservative debt strategy: you have the cash when the debt comes due. This focus on financial strength is central to the company's Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH).

The company's capital allocation model, which targets returning around 75 percent of free cash flow to stockholders, is a clear sign that management views debt as well-controlled. They are using their cash flow for shareholder returns, not debt service. That's a strong signal of confidence in their long-term financial stability.

Liquidity and Solvency

You want to know if Arch Resources, Inc. (ARCH) has the cash to cover its short-term bills and keep its operations running smoothly. The quick answer is yes, absolutely-the company's post-merger liquidity position is defintely strong, anchored by high cash reserves and robust operating cash flow, even while managing a major operational challenge.

Keep in mind that as of the first quarter of 2025, Arch Resources, Inc. completed its merger with CONSOL Energy Inc., forming a new entity, Core Natural Resources, Inc. (CNR). The most relevant 2025 data reflects this combined financial strength, which is the true picture of the company's liquidity today. This combined entity is the one you are now investing in.

Assessing Liquidity Positions: Ratios and Working Capital

The core liquidity ratios for the combined entity, Core Natural Resources, Inc., show a very healthy short-term financial picture. We look at the Current Ratio and the Quick Ratio (or Acid-Test Ratio), which measure the ability to pay current liabilities with current assets.

• Current Ratio: At approximately 3.69, this is excellent. It means the company has $3.69 in current assets to cover every dollar of current liabilities. A ratio above 2.0 is generally seen as very strong, indicating a wide margin of safety.
• Quick Ratio: This ratio, which excludes less-liquid inventory, stands at roughly 2.07. This tells you the company can cover its short-term obligations more than twice over with just its most liquid assets (cash and receivables). Anything over 1.0 is great.

Here's the quick math on the working capital (current assets minus current liabilities) based on the latest available 2025 figures: Total Current Assets were approximately $1.400 billion, against Total Current Liabilities of about $379 million. This leaves a massive Working Capital surplus of approximately $1.021 billion. This is a significant buffer, plus it's a key source of funding for ongoing operations and capital returns.

Cash Flow Statement Overview

The Cash Flow Statement for the second quarter of 2025 (Q2 2025) highlights strong cash generation from the combined operations, despite some operational headwinds. This is where the real liquidity strength is visible.

The $220.2 million in operating cash flow for Q2 2025 is a powerful indicator. It shows the core business is a cash machine. The company is generating enough cash to cover its capital expenditures and still produce $131.1 million in Free Cash Flow (FCF), which is the cash truly available to pay down debt, pay dividends, or repurchase shares. The company has already deployed $87.1 million of this cash to shareholders in Q2 2025 alone, a clear financing activity that underscores their confidence.

Liquidity Strengths and Near-Term Risks

The liquidity position is a major strength. As of June 30, 2025, Core Natural Resources reported total liquidity of $948 million, including $413 million in cash and equivalents. Also, the company's merger-related annual synergy target has been increased to between $150 million and $170 million, which will further boost future cash flow and liquidity.

However, no mining operation is without risk. The Leer South mine experienced a combustion event that suspended longwall production, with shutdown-related costs expected to be between $20 million and $30 million in Q3 2025. The good news is that the company expects insurance compensation to exceed $100 million, which should more than offset the costs and is a key factor in mitigating this operational risk. The balance sheet is strong enough to absorb this temporary impact.

To be fair, the liquidity picture is robust, but the near-term cash flow is sensitive to the metallurgical coal market, which is prone to volatility. Still, the company is fully committed for 2025 in its Powder River Basin segment and has commitments for virtually all its projected coking coal sales volumes for the year, which provides a solid revenue floor.

Next Step: Review the company's long-term strategy, particularly the Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH)., to align this strong financial health with their future growth plans.

Valuation Analysis

You want to know if Arch Resources, Inc. (ARCH) is a value trap or a genuine opportunity. Based on the latest 2025 fiscal year estimates, the stock appears undervalued, especially when looking at future earnings and enterprise value multiples. Its forward Price-to-Earnings (P/E) ratio is remarkably low, suggesting the market hasn't fully priced in the expected earnings rebound.

The core of this valuation story rests on its low multiples. While the trailing twelve months (TTM) P/E ratio has been volatile, the projected 2025 P/E ratio is sitting near 6.77. Here's the quick math: using the current price of around $134.83 against the consensus 2025 Earnings Per Share (EPS) forecast of $19.90, you get a very attractive multiple. This is defintely a low valuation compared to the broader market, which often trades in the high teens or twenties.

For a more complete picture, we need to look beyond just earnings. The Enterprise Value-to-EBITDA (EV/EBITDA) ratio is another critical tool, as it accounts for debt and cash (a better measure for capital-intensive companies like coal miners).

• Forward EV/EBITDA: The 2025 forward estimate is an extremely low 3.4x, which is well below the industry median and signals significant undervaluation.
• Price-to-Book (P/B) Ratio: The TTM P/B ratio is 1.69, which is reasonable and suggests the stock is trading at a modest premium to its net asset value, not an excessive one.

The stock price trend over the last 12 months shows a company battling market sentiment, but still maintaining a solid floor. The 52-week trading range for Arch Resources, Inc. has been between a low of $116.44 and a high of $187.60. As of early 2025, the stock is trading around the $134.83 mark, representing a -27.41% decrease over the past year. This decline is why the forward ratios look so cheap; the price has fallen while future earnings expectations remain strong.

Dividends and Analyst Sentiment

For income-focused investors, Arch Resources, Inc. offers a variable but growing return. The forward dividend yield as of November 2025 is approximately 0.74%. What matters more is the payout ratio, which shows how sustainable that dividend is. The forward payout ratio is a very conservative 7.22%. This low ratio gives the company huge flexibility to manage capital, either through special dividends, share buybacks, or debt reduction.

Wall Street analysts are generally bullish on this outlook. The current consensus rating from 12 analysts is a Buy. This isn't a unanimous 'Strong Buy,' but it's a clear positive signal. The average one-year price target is $168.30, which implies a potential upside of approximately 24.82% from the recent stock price.

Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH).

Here is a snapshot of the key valuation metrics for Arch Resources, Inc.:

The bottom line is that the market is still treating Arch Resources, Inc. with skepticism, which is why the valuation multiples are so low. But, the analyst community and the forward-looking earnings estimates point to a significant disconnect. The risk is that the 2025 EPS of $19.90 doesn't materialize.

Risk Factors

You're looking at Arch Resources, Inc. (ARCH) right now, but you need to understand that its financial health in 2025 is deeply tied to a massive, complex transition. The biggest near-term risk isn't just the market; it's the pending merger with CONSOL Energy to create Core Natural Resources, expected to close in Q1 2025. This deal is designed to create a premier, low-cost producer, but any large merger carries significant execution risk.

Honesty, the core risk is whether the combined entity can actually realize the projected annual cost synergies of $110 million to $140 million. If the integration process is slower or more difficult than anticipated, that synergy number drops, and so does the expected boost to profitability. Plus, the merger is already facing legal scrutiny from ongoing shareholder investigations over potential securities law violations, which adds uncertainty and legal costs. Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH).

Operational and Financial Headwinds

While the long-term strategy is focused on high-quality metallurgical (met) coal, the company still faces tangible operational risks that hit the bottom line. You saw a preview of this in Q3 2024, where geological challenges at the key Leer and Leer South mines cut production and spiked operating costs. This is not a one-off; mining is defintely a tough business.

The financial forecasts for 2025 look solid, with analyst estimates projecting Revenue of around $2.53 Billion and Earnings Per Share (EPS) of $15.57, but these numbers rely on stable operations. A key operational challenge is managing costs, which vary significantly by mine. For instance, in Q2 2025, the cash cost of coal sold per ton showed a wide spread across segments:

A small production hiccup in a higher-cost mine, like the one priced at $91.00 per ton, can quickly erode margins, especially if met coal prices are volatile. The company is mitigating this by transitioning the West Elk mine to a better-quality coal seam through mid-2025, which should boost sales volumes and pricing.

External Market and Regulatory Pressures

The external risks are a classic mix of market volatility and regulatory headwinds. Arch Resources, Inc. is a coal company, so it's exposed to global steel demand for its met coal and the continued decline of US thermal coal for power generation.

• Met Coal Price Volatility: The global metallurgical coal market is projected to grow by $99.6 billion from 2025-2029, driven by steel demand, but price swings are a constant challenge. Geopolitical risks, like US-China trade relations and tariffs, still threaten export stability.
• Thermal Coal Decline: The domestic thermal coal market is structurally weak, with US electric utilities retiring coal-fired power plants. Arch Resources, Inc.'s internal view is that Powder River Basin (PRB) coal consumption will drop by about 5% to 10% per year.
• Regulatory and ESG Risk: Environmental regulations are only getting tighter. Arch Resources, Inc. has accelerated closure plans for its PRB mines, like Coal Creek and Black Thunder, and has fully funded the reclamation fund for those assets. This is a smart move to contain future environmental liabilities, but it confirms the segment is in wind-down mode.

The company is addressing the thermal decline by reviewing its PRB assets for potential divestiture, which would remove a drag on the overall business. That's a clear action.

Growth Opportunities

You're looking for a clear path forward on Arch Resources, Inc. (ARCH), and the direct takeaway is this: the company's future growth is entirely tied to its January 2025 merger with CONSOL Energy Inc., creating the new entity, Core Natural Resources. This strategic move fundamentally shifts the investment thesis from a pure-play producer to a diversified North American coal giant.

The core growth driver is the creation of this new, larger entity, which now operates as Core Natural Resources. This merger, valued at over $5 billion, positions the combined company as a premier producer and exporter of high-quality, low-cost coals. Honestly, this is the biggest product innovation and market expansion you could ask for; it's a total business model pivot.

Here's the quick math on the near-term financial picture, using the most recent 2025 data. Analysts, as of November 2025, have set a consensus price target of $165 for the former Arch Resources, Inc. (ARCH) stock, reflecting a 'Strong Buy' consensus from key analysts. What this estimate hides, still, is the full integration benefit, but the trailing twelve months (TTM) revenue as of November 2025 stands at $2.68 Billion USD. This figure reflects a challenging revenue trend, but the focus now is on the combined entity's ability to stabilize and grow margins.

Arch Resources, Inc. (ARCH)'s competitive advantages are now amplified within Core Natural Resources, particularly in the metallurgical (met) coal segment-the high-quality coal used for steelmaking. This segment, which historically contributed about 80% of ARCH's earnings, is positioned for long-term demand growth driven by global urbanization, especially in India and Southeast Asia.

Key growth drivers for the combined Core Natural Resources include:

• Logistical Advantage: Shipping met coal to Europe and South America in about two weeks, a significant edge over Australian competitors who take around five weeks.
• Cost Structure Improvement: Management expects improved yields and lower costs across the thermal segment in 2025. This is already visible in the Q2 2025 Segment Cash Cost of Coal Sold per Ton, which for one key segment was as low as $12.44.
• Strategic Pivot: The company's long-term pivot toward being a pure-play metallurgical producer is complete, focusing capital expenditure on high-margin met coal assets like the world-class Leer South mine.

You should view the future revenue growth projections through the lens of the new company. While the last consensus for ARCH's standalone full-year Earnings Per Share (EPS) was $2.85, the real opportunity lies in the synergies and operational efficiencies of the combined entity. The strategic initiative is clear: dominate the high-quality met coal export market. You can read more about the foundational values that drove this decision here: Mission Statement, Vision, & Core Values of Arch Resources, Inc. (ARCH).

To be fair, the thermal coal segment still faces pressure from oversupplied Powder River Basin (PRB) assets, a near-term risk. Still, the metallurgical segment's strength, supported by a record quarter for met production and enhanced logistics, is the primary engine. The legislative designation of metallurgical coal as a 'critical material' in the 2025 'One Big Beautiful Bill Act' also provides a tailwind through the Advanced Manufacturing Tax Credit (45X). This defintely helps the investment case.

The table below summarizes the financial context that frames the growth outlook:

Your next concrete step is to track the Core Natural Resources (CNR) Q3 2025 earnings report for the first full post-merger operational results to validate the synergy projections. Finance: model the combined entity's free cash flow generation by the end of the year.