Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Position Status | Return(%)* |
|---|---|---|---|---|---|---|---|---|
| 17 Dec, 25 | AREC | Buy | USD 2.35 | USD 2.5 | USD 2.6 | 6 days | Closed |
12.77%
|
*Return(%) represent the percentage change between the entry price and exit price of the recommendation.
Data Powered by EOD Historical Data (“EODHD”).
American Resources Corporation, together with its subsidiaries, extracts, processes, transports, and sells metallurgical coal to the steel and industrial industries. It supplies raw materials; and sells coal used in pulverized coal injections. The company was founded in 2006 and is headquartered in Fishers, Indiana.
Lower General and Administrative Expenses: General and administrative expenses totaled USD 2.54 million in Q3 FY25, versus USD 6.25 million in Q3 FY24
Improvement in Net Loss Attributable to Shareholders: Net loss attributable to AREC shareholders was USD (4.40) million in Q3 FY25, compared with USD (10.61) million in Q3 FY24
Continued Operating Losses: Operating loss stood at USD (4.38) million in Q3 FY25, compared with an operating loss of USD (8.83) million in Q3 FY24
Decline in Reported Revenue: Total revenue amounted to USD 0.17 million in Q3 FY25, compared with USD 0.24 million in Q3 FY24
AREC faces elevated investment risk due to its going-concern uncertainty, highly leveraged balance sheet, and dependence on successful commercialization of early-stage critical materials businesses to offset persistent operating losses
| Entry Price | Support* | Target 1** | Target 2** |
|---|---|---|---|
| 2.35 | 2.08 | 2.5 | 2.6 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
**Target prices may vary by ±0.5% depending on market volatility.
Strategic Transition and Operating Focus: American Resources Corporation continued its strategic transition away from traditional coal production toward critical materials and advanced processing platforms. During the period, the Company maintained minimal coal-related activity while prioritizing the development of its ReElement and Electrified Materials segments, which remain in early-stage commercialization. This shift reflects management’s intent to reposition the business toward longer-term growth opportunities in rare earths, battery recycling, and metal recovery.
Revenue Profile and Commercial Progress: Operational revenues remained modest in Q3 FY25, reflecting the Company’s development-stage status. Revenue generation was largely driven by limited rare earth oxide sales and metal recovery activity, supplemented by small service-related income streams. While commercial scale has not yet been achieved, these revenues indicate incremental progress toward monetization of the Company’s non-coal assets.
Cost Structure and Operating Discipline: The Company demonstrated meaningful operating discipline during the quarter, with a significant reduction in general and administrative expenses compared to the prior year. This reflects tighter cost controls, lower professional and litigation expenses, and the absence of certain non-recurring charges incurred in Q3 FY24. Development and overhead costs remain elevated but are aligned with ongoing project build-out activities.
Earnings Performance and Loss Reduction: AREC reported a narrower net loss in Q3 FY25 compared with Q3 FY24, supported primarily by lower operating expenses rather than revenue growth. The improvement in bottom-line performance highlights management’s focus on reducing cash burn during the transition phase, although the Company remains loss-making at the operating level.
Liquidity and Capital Structure: Liquidity improved sequentially during FY25, aided by financing activity and equity issuances used to settle liabilities. However, the balance sheet remains highly leveraged, with substantial bond obligations, convertible debt, and lease-related liabilities. The Company continues to operate with a stockholders’ deficit, underscoring ongoing reliance on external financing.
Balance Sheet and Non-Controlling Interests: Total assets remained broadly stable year over year, while non-controlling interests increased materially due to the continued consolidation of variable interest entities. Although these structures allow AREC to retain operational control, they add complexity to financial reporting and dilute the economic interest attributable to common shareholders.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on American Resources Corporation (NASDAQ: AREC) at the closing market price of USD 2.35, as on Dec 16, 2025.
Data Powered by EOD Historical Data (“EODHD”).
Sector: Basic Materials Industry: Coking Coal
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| AREC American Resources Corp Class A |
0.47 15.87% | 3.40 | - | 12.14 | 9.98 | 2.19 | 683.12 | -8.879 |
| AMR Alpha Metallurgical Resources Inc |
6.87 3.39% | 209.33 | 8.64 | 2.66 | 0.93 | 1.83 | 0.77 | 4.31 |
| HCC Warrior Met Coal Inc |
1.44 1.61% | 90.78 | 6.78 | 11.40 | 1.84 | 1.72 | 1.50 | 3.91 |
| STMRF Stanmore Resources Limited |
- -% | 1.98 | 2.97 | 24.33 | 0.77 | 1.42 | 0.83 | 1.94 |
| CODQL Coronado Global Resources Inc |
- -% | 0.27 | 2.17 | 3.80 | 0.72 | 1.44 | 0.56 | 2.33 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels as on December 17, 2025. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned has been achieved and is subject to the factors discussed above.
Note 4: StockNextt reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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