REX American Resources Corporation

REX

$41.62

-2.76%

N/A-$1.18

Basic Materials

Chemicals

NYSE

Active Trading

REX American Resources Corporation, along with its various subsidiaries, manufactures and distributes ethanol across the United States. The company's product portfolio extends ...

Fundamental Analysis of REX

Key Strengths

Strong balance sheet with minimal debt (debt-to-equity of 3.1%) and high liquidity (current ratio 6.76)

Leading position in ethanol production with strategic plant interests and logistics infrastructure

Risk Factors

Commodity price volatility: margins are highly sensitive to corn and ethanol prices, which can swing significantly

Policy and regulatory risks: changes in RFS mandates, tax credits, or trade policies could adversely affect demand and profitability

Profitability

Net Margin17.61%

Operating Margin14.84%

Valuation

P/E Ratio11.40x

Current Ratio6.88

Efficiency

ROE19.44%

ROA14.08%

Fundamental Analysis of REX

REX American Resources Corporation is a leading U.S. ethanol producer with majority-owned subsidiaries, One Earth Energy and NuGen Energy, operating in the renewable fuels sector. The company benefits from strong industry tailwinds, including government mandates for ethanol blending (Renewable Fuel Standard) and growing demand for cleaner-burning fuels. Financially, REX displays robust profitability with a net margin of 14.1% and an operating margin of 11.0% (TTM). The balance sheet is conservative, with negligible debt (debt-to-equity ratio of 3.1%) and a current ratio of 6.76, indicating excellent liquidity. Return on equity stands at 15.8%, and return on assets at 11.5%, reflecting efficient capital allocation. The company trades at a P/E ratio of 15.6, which is attractive relative to its earnings yield of 6.4% and PEG ratio of 0.21, suggesting undervaluation given its growth prospects. REX generates consistent free cash flow, albeit with a modest FCF yield of 3.2%, partly due to capital expenditures for plant maintenance and expansion. The company pays no dividend, instead reinvesting in growth and share buybacks. Key growth drivers include capacity expansions at its ethanol plants, increased production of high-value co-products like distillers corn oil, and efficiency improvements. The management has a disciplined approach to capital allocation, focusing on debt reduction and shareholder returns. Long-term fundamentals remain solid, underpinned by regulatory support and the increasing role of ethanol in reducing greenhouse gas emissions. However, the company is exposed to cyclical commodity prices, particularly corn and ethanol, and faces structural risks from policy changes and evolving fuel technology. Overall, REX presents a fundamentally sound investment case with strong profitability and balance sheet strength, though near-term earnings may be volatile.

Key Strengths of REX

Strong balance sheet with minimal debt (debt-to-equity of 3.1%) and high liquidity (current ratio 6.76)
Leading position in ethanol production with strategic plant interests and logistics infrastructure
High profitability metrics: net margin 14.1%, ROE 15.8%, and ROA 11.5%
Attractive valuation with P/E of 15.6 and PEG of 0.21, indicating growth at reasonable price
Consistent free cash flow generation, though partially reinvested for growth
Beneficiary of renewable fuel mandates and trends toward cleaner energy
Experienced management with prudent capital allocation and share buyback program

Risk Factors of REX

Commodity price volatility: margins are highly sensitive to corn and ethanol prices, which can swing significantly
Policy and regulatory risks: changes in RFS mandates, tax credits, or trade policies could adversely affect demand and profitability
Dependence on a few key production facilities: operational disruptions at these plants could materially impact revenue
Cyclical industry with potential oversupply leading to margin compression
Technological disruption from electric vehicles and alternative fuels could reduce long-term ethanol demand
Concentration of cash deposits with financial institutions exceeding FDIC limits, posing counterparty risk
No dividend, relying on capital appreciation for shareholder returns

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$1.37B

11.4x

P/E Ratio

2.0x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin21.54%

Net Profit Margin17.61%

Debt/Equity Ratio0.03

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of REX

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of REX

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	11.25%	—	—	Flat
Operating Margin	—	11.79%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of REX

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	6.760	—	—	Flat
Quick Ratio	—	6.354	—	—	Flat
Debt / Equity	—	0.031	—	—	Flat

Valuation of REX

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	21.65x	—	—	Flat
P/B	—	2.55x	—	—	Flat

Supply Chain of REX

RELATIONS

Upstream

Corn Growers / Grain Elevators (Illinois & South Dakota regions)Natural Gas Suppliers (various regional utilities)Novonesis (Novozymes A/S)CPH:NSIS_BICM, Inc.GEA Group AGETR:G1ABNSF Railway (Berkshire Hathaway subsidiary)NYSE:BRK.B Union Pacific CorporationNYSE:UNP Nutrien Ltd.NYSE:NTR CF Industries Holdings, Inc.NYSE:CF The Mosaic CompanyNYSE:MOS

Downstream

Marathon Petroleum CorporationNYSE:MPC Valero Energy CorporationNYSE:VLOBP p.l.c.LON:BPShell plcLON:SHELArcher-Daniels-Midland Company (ADM)NYSE:ADMCargill, IncorporatedEco-Energy LLCTyson Foods, Inc.NYSE:TSNWholesale Fuel Terminals & Marketers (various regional)Local & Regional Animal Feed Distributors

Proxies

Green Plains Inc.NASDAQ:GPRE Pacific Ethanol, Inc. (Alto Ingredients, Inc.)NASDAQ:ALTO Valero Energy CorporationNYSE:VLO Archer-Daniels-Midland CompanyNYSE:ADMPOET, LLC

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Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer