Is Alliance Resource Partners LP overvalued or undervalued?

As of 25 October 2022, the valuation grade for Alliance Resource Partners LP moved from very expensive to very attractive, indicating a significant shift in its market perception. The company is currently considered undervalued, with a P/E ratio of 11, which is notably lower than its peers such as CONSOL Energy, Inc. at 22.56 and Warrior Met Coal, Inc. at 24.62. Additionally, the EV to EBITDA ratio stands at 5.70, further highlighting its attractive valuation compared to the industry.
With a return on capital employed (ROCE) of 16.35% and a return on equity (ROE) of 16.61%, Alliance Resource Partners LP demonstrates strong profitability metrics that support its valuation. The company's recent stock performance has lagged behind the S&P 500 in the short term, but its long-term growth of 617.83% over the past five years suggests a solid investment opportunity. Overall, the combination of favorable ratios and a strong financial profile positions Alliance Resource Partners LP as a compelling choice in the current market landscape.