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    Do REX American Resources’ (REX) Margin Pressures Undermine the Story Behind Its Rising Sales?

    Simply Wall St·12/18/2025 20:21:31
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    • In December 2025, REX American Resources reported third-quarter results showing sales of US$175.63 million and net income of US$23.41 million, with diluted earnings per share from continuing operations at US$0.71, slightly above the prior year.
    • However, for the first nine months of the fiscal year, net income declined to US$39.20 million even as sales edged up to US$492.53 million, highlighting pressure on profitability.
    • With third-quarter earnings per share roughly flat year over year, we'll now explore how this shapes REX American Resources' existing investment narrative.

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    REX American Resources Investment Narrative Recap

    To own REX American Resources, you need to believe in the long term value of its ethanol platform and the upside from carbon capture and expansion projects, despite near term earnings swings. The latest results show modest sales growth but weaker nine month profitability, which mildly heightens concerns around margin pressure as the company invests in growth and faces potential volatility in ethanol pricing and export conditions.

    Against this backdrop, the expanded share repurchase authorization to 3,000,000 shares stands out, as it can help support earnings per share even when net income is under pressure. For investors watching catalysts like carbon capture tax credits or higher ethanol demand, the buyback activity also shapes how much of any future improvement could flow through on a per share basis.

    Yet despite the recent EPS resilience, investors should be aware that margin pressure from lower ethanol and co product pricing could still...

    Read the full narrative on REX American Resources (it's free!)

    REX American Resources' narrative projects $839.6 million revenue and $50.0 million earnings by 2028. This requires 9.3% yearly revenue growth and an $8.2 million earnings decrease from $58.2 million today.

    Uncover how REX American Resources' forecasts yield a $49.37 fair value, a 45% upside to its current price.

    Exploring Other Perspectives

    REX 1-Year Stock Price Chart
    REX 1-Year Stock Price Chart

    Two fair value estimates from the Simply Wall St Community span a wide range, from about US$17.78 to US$49.37 per share, underscoring how far opinions can differ. Against that backdrop, recent signs of weaker nine month profitability and pressure on margins give you a concrete risk to weigh as you compare these alternative viewpoints on REX American Resources.

    Explore 2 other fair value estimates on REX American Resources - why the stock might be worth 48% less than the current price!

    Build Your Own REX American Resources Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.