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1. Company Snapshot

1.a. Company Description

Rayonier Advanced Materials Inc.manufactures and sells cellulose specialty products in the United States, China, Canada, Japan, Europe, Latin America, other Asian countries, and internationally.The company operates through High Purity Cellulose, Paperboard, and High-Yield Pulp segments.


Its products include cellulose specialties, which are natural polymers that are used as raw materials to manufacture a range of consumer-oriented products, such as liquid crystal displays, impact-resistant plastics, thickeners for food products, pharmaceuticals, cosmetics, cigarette filters, high-tenacity rayon yarn for tires and industrial hoses, food casings, paints, and lacquers.The company also offers commodity products, such as commodity viscose pulp used in woven applications, including rayon textiles for clothing and other fabrics, as well as in non-woven applications comprising baby wipes, cosmetic and personal wipes, industrial wipes, and mattress ticking; and absorbent materials consisting of fluff fibers that are used as an absorbent medium in disposable baby diapers, feminine hygiene products, incontinence pads, convalescent bed pads, industrial towels and wipes, and non-woven fabrics.In addition, it provides paperboards for packaging, printing documents, brochures, promotional materials, paperback books or catalog covers, file folders, tags, and tickets; and high-yield pulps to produce paperboard and packaging products, printing and writing papers, and various other paper products.


The company was founded in 1926 and is headquartered in Jacksonville, Florida.

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1.b. Last Insights on RYAM

Recent drivers behind Rayonier Advanced Materials Inc.'s performance include: * Strong third quarter 2024 results, with improved product mix and managed operating costs, leading to a 14% increase in Adjusted EBITDA and $99 million of Adjusted Free Cash Flow. * Successful refinancing of its capital structure, which has improved its financial flexibility. * Growing demand for cellulose specialties, supporting improved product mix and margins. * Increased free cash flow guidance, indicating a strong cash position. * A "hammer chart pattern" indicating support found by the stock after losing some value lately, coupled with an upward trend in earnings estimate revisions, suggesting a potential trend reversal. * Scheduling of third quarter earnings release, indicating transparency and commitment to shareholder communication.

1.c. Company Highlights

2. RYAM's Q3 2025 Earnings: Weaker Results Amidst Challenging Market Conditions

RYAM reported adjusted EBITDA of $42 million for Q3 2025, a $9 million decrease from Q3 2024. Revenue was $353 million, down $48 million year-over-year, while operating income was $9 million, an improvement of $26 million compared to the prior year. The company's earnings per share (EPS) was -$0.07, in line with analyst estimates. The adjusted EBITDA margin was around 12%, down from 14% in Q3 2024. Revenue decline was largely driven by weaker paperboard markets and proactive downtime.

Publication Date: Nov -29

📋 Highlights
  • Adjusted EBITDA Decline:: Q3 2025 adjusted EBITDA fell to $42M, down $9M YoY, driven by weaker paperboard markets and increased market weakness.
  • Revenue and Operating Income Shift:: Revenue dropped $48M to $353M YoY, while operating income improved $26M to $9M, reflecting cost discipline.
  • Cellulose Specialties Performance:: Returned to 32% EBITDA margins ($66M) despite 12% sales decline, offset by higher prices and volume normalization.
  • Temiscaming Turnaround Challenges:: Expected $14M EBITDA loss in 2025 due to cost and production constraints, with $5M retained via production transfers by 2026.
  • Future Cost and Project Benefits:: $30M cost reductions completed in 2025, plus $20M EBITDA benefits from 2027 projects and $500M renewable power investment at Jesup.

Segment Performance

The Cellulose Specialties business performed near expectations, returning to normalized EBITDA margins in Q3, with net sales of $204 million, down 12% year-over-year. Adjusted EBITDA was $66 million, with margins increasing to 32%. In contrast, the fluff business faced headwinds due to the China 10% tariffs. Biomaterials' net sales were flat at $8 million, with adjusted EBITDA at $1 million. Cellulose Commodities and Paperboard segments also reported weaker results, with adjusted EBITDA negative $3 million and $1 million, respectively.

Guidance Update and Outlook

The company updated its 2025 guidance, with adjusted EBITDA now expected to be $135-140 million, down from the prior range of $150-160 million. RYAM is executing a plan to increase EBITDA to over $300 million by 2027, targeting significant price resets for Cellulose Specialty products and implementing cost reduction programs. The company expects to benefit from strategic capital projects, including a $500 million renewable power project at Jesup and a $64 million bioethanol project at Fernandina Beach.

Valuation and Leverage

RYAM's valuation metrics indicate a potentially compelling investment opportunity, with an EV/EBITDA ratio of 11.39 and a P/S Ratio of 0.3. The company's net secured leverage ratio was 4.1x, and it ended the quarter with $140 million of total liquidity, including $77 million of cash. RYAM plans to pursue a refinancing in 2026 to lower interest expense, leveraging expected stronger operating performance and potentially lower debt from the divestment of Temiscaming.

Operational Updates

The Temiscaming site is undergoing a turnaround, with a plan to return to historical profitability through cost reductions, new product development, and commercialization. The company expects an EBITDA loss of about $14 million at Temiscaming in 2025. RYAM is also working on developing a dissolving wood pulp product that would qualify for tariff-free entry into China, although production costs are currently higher than paying the tariff.

3. NewsRoom

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Rayonier Advanced Materials Inc. (RYAM) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Rayonier Advanced Materials (RYAM) Q3 Earnings

Nov -05

Source: zacks.com

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Rayonier Advanced Materials (RYAM) Reports Q3 Loss, Lags Revenue Estimates

Nov -05

Source: zacks.com

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RYAM Reports Third Quarter 2025 Results

Nov -04

Source: businesswire.com

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RYAM Schedules Third Quarter 2025 Earnings Release

Oct -21

Source: businesswire.com

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RYAM Expands Kallima® Portfolio with Enhanced Freezer Application Folding Carton Board

Oct -06

Source: businesswire.com

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Is the Options Market Predicting a Spike in Rayonier Advanced Materials Stock?

Aug -27

Source: zacks.com

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RYAM Sales Drop 19%

Aug -06

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.62%)

6. Segments

High Purity Cellulose

Expected Growth: 5%

High purity cellulose from Rayonier Advanced Materials Inc. is driven by increasing demand for sustainable and eco-friendly products, growing use in pharmaceutical and food applications, and rising prices due to supply chain constraints and raw material costs. Additionally, the company's strategic investments in capacity expansion and product diversification contribute to its 5% growth.

Paperboard

Expected Growth: 3%

Rayonier Advanced Materials Inc.'s paperboard segment growth is driven by increasing demand for sustainable packaging, rising e-commerce sales, and growing adoption of paper-based products in the food service industry. Additionally, the company's strategic investments in operational efficiency and product innovation are expected to contribute to the segment's growth.

High-Yield Pulp

Expected Growth: 4%

Rayonier Advanced Materials' High-Yield Pulp segment growth is driven by increasing demand for fluff pulp in diapers and hygiene products, strong pricing power, and capacity expansion projects. Additionally, the company's focus on operational efficiency and cost reduction initiatives contribute to its growth momentum.

Eliminations

Expected Growth: 2%

Rayonier Advanced Materials Inc.'s 2% growth is driven by increasing demand for cellulose specialties, strong pulp prices, and growing sales of high-purity cellulose. Additionally, the company's cost savings initiatives, operational efficiencies, and strategic capital investments contribute to its growth momentum.

7. Detailed Products

Pulp

Rayonier Advanced Materials Inc. produces high-quality pulp used in the manufacturing of paper, tissue, and other cellulose-based products.

High-Yield Pulp

A high-strength pulp used in the production of packaging, paperboard, and specialty papers.

Fluff Pulp

A soft, absorbent pulp used in the production of baby diapers, adult incontinence products, and feminine hygiene products.

Lignin

A natural, renewable, and biodegradable product used in the production of construction materials, asphalt, and other industrial applications.

Bio-chemicals

A range of bio-based chemicals used in the production of plastics, adhesives, and other industrial applications.

8. Rayonier Advanced Materials Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Rayonier Advanced Materials Inc. faces moderate threat from substitutes, as customers have limited alternatives for its cellulose specialties products.

Bargaining Power Of Customers

Rayonier Advanced Materials Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Rayonier Advanced Materials Inc. relies on a few key suppliers for raw materials, which gives them some bargaining power.

Threat Of New Entrants

The high capital requirements and regulatory hurdles make it difficult for new entrants to enter the cellulose specialties market.

Intensity Of Rivalry

The cellulose specialties market is highly competitive, with several established players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.12%
Debt Cost 12.25%
Equity Weight 48.88%
Equity Cost 19.17%
WACC 15.63%
Leverage 104.58%

11. Quality Control: Rayonier Advanced Materials Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Valhi

A-Score: 4.5/10

Value: 9.5

Growth: 3.1

Quality: 5.9

Yield: 4.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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AdvanSix

A-Score: 4.4/10

Value: 7.7

Growth: 2.9

Quality: 4.1

Yield: 4.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

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LSB Industries

A-Score: 3.8/10

Value: 8.1

Growth: 2.8

Quality: 5.0

Yield: 0.0

Momentum: 3.0

Volatility: 3.7

1-Year Total Return ->

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ASP Isotopes

A-Score: 3.4/10

Value: 6.0

Growth: 1.4

Quality: 3.0

Yield: 0.0

Momentum: 9.5

Volatility: 0.3

1-Year Total Return ->

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Rayonier Advanced Materials

A-Score: 3.1/10

Value: 6.6

Growth: 3.8

Quality: 0.9

Yield: 0.0

Momentum: 4.0

Volatility: 3.3

1-Year Total Return ->

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Origin Materials

A-Score: 3.1/10

Value: 8.4

Growth: 5.3

Quality: 4.0

Yield: 0.0

Momentum: 0.0

Volatility: 0.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.3$

Current Price

6.3$

Potential

-0.00%

Expected Cash-Flows