Ramaco Resources, Inc. (METC): A Bear Case Theory 

We came across a bearish thesis on Ramaco Resources, Inc. on Asymmetric Capital’s Substack by Srikanth Thangellamudi. In this article, we will summarize the bulls’ thesis on METC. Ramaco Resources, Inc.’s share was trading at $14.95 as of December 1st. METC’s trailing and forward P/E were 9.47 and 5.49 respectively according to Yahoo Finance.

Ramaco Resources’ Brook Mine narrative is increasingly defined by its unproven rare-earth ambitions, centered on scandium oxide, which the company projects will drive over US$500 million in EBITDA by 2028. While the coal business generates steady cash flow, the future valuation is heavily leveraged on a rare-earth commercialization plan that remains theoretical. Management acknowledges key dependencies—customer contracts, processing yields, and pricing—all of which are unresolved. The project is still in pilot stage, with no current rare-earth output or revenue diversification beyond coal.

The company’s model assumes scandium oxide sales at US$3,750/kg and annual production of 179 tons, implying US$611 million in revenue—figures that vastly exceed global supply and realistic pricing. With the global scandium market closer to US$600–700/kg and total annual production under 40 tons, Ramaco’s projections appear highly inflated. At market prices, Brook’s scandium output would yield barely US$117 million, not US$611 million. Moreover, no binding customer contracts or significant government funding back these assumptions, unlike international peers that have secured offtake agreements or federal support.

The mine’s full-scale facility remains years away, and even modest price or yield deviations could erode projected returns by over half. In contrast, Ramaco’s coal operations remain the only income-generating segment, with Q3 2025 revenue of US$121 million and adjusted EBITDA of US$8.4 million. A standalone coal valuation supports roughly US$12–15 per share, with an additional US$8–10 optionality for the rare-earth venture, implying a fair value near US$20–25 per share versus market prices that overstate speculative upside.

Previously we covered a bullish thesis on Ramaco Resources, Inc. (METC) by Unemployed Value Degen in October 2024, which highlighted its low-cost coal operations, growth trajectory, and rare-earth optionality. The company’s stock price has appreciated approximately 4% since our coverage. This is because the thesis partially played out. Srikanth Thangellamudi shares a contrarian view but emphasizes valuation risks from unrealistic scandium assumptions.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.