Is Warrior Met Coal, Inc. overvalued or undervalued?

As of 30 April 2025, Warrior Met Coal, Inc. has moved from a fair to an expensive valuation grade. The company is currently overvalued based on its financial metrics. The P/E ratio stands at 25, while the industry average P/E is notably lower, indicating a premium valuation. Additionally, the EV to EBITDA ratio is 9.05, which is higher compared to peers like Alliance Resource Partners LP at 5.82 and Peabody Energy Corp. at 2.73, further supporting the overvaluation assessment.
In terms of profitability, the company's ROE is 5.01% and ROCE is 4.96%, which are relatively low and suggest inefficiencies compared to its peers. The high dividend yield of 64.05% may attract income-focused investors, but the underlying valuation metrics indicate that the stock is not justified at its current price of 44.17. Recent performance shows that Warrior Met Coal has underperformed against the S&P 500, with a year-to-date return of -18.57% compared to the index's 2.44%, reinforcing the notion that the stock is overvalued.