Investment Thesis
ADMA demonstrates exceptional fundamental strength with 70.5% gross margins, 50.9% operating margins, and 19.6% revenue growth, generating substantial free cash flow (48.7% FCF margin) on a fortress balance sheet (0.50x debt/equity). However, the significant 25.9% YoY EPS decline despite positive net income growth indicates concerning capital structure changes or dilution requiring clarification before a stronger conviction.
Strengths
- Outstanding profitability: 70.5% gross margin and 50.9% operating margin demonstrate exceptional pricing power and operational efficiency
- Strong revenue growth at 19.6% YoY coupled with 48.7% free cash flow margin shows sustainable, cash-generative business model
- Fortress balance sheet: 6.95x current ratio, 0.50x debt/equity, 15.5x interest coverage, and $138.2M cash provide significant financial flexibility
- Capital-light operations: Low capex ($2.5M) relative to FCF generation ($55.7M) indicates minimal reinvestment needs
Risks
- EPS declined 25.9% YoY despite net income growth, suggesting substantial share dilution that erodes shareholder value
- Biological products sector faces intense regulatory scrutiny and competitive pressures that could compress margins
- Moderate ROE (11.6%) relative to profitability levels suggests capital inefficiency or recent significant capital raises diluting existing shareholders
Key Metrics to Watch
- Share count trend and EPS trajectory to understand dilution source and forward earnings power
- Gross margin sustainability under competitive and regulatory pressures
- Operating cash flow consistency and free cash flow deployment strategy (debt paydown vs. M&A vs. buybacks)
Financial Metrics
Revenue
114.5M
Net Income
45.3M
EPS (Diluted)
$0.19
Free Cash Flow
55.7M
Total Assets
665.2M
Cash
138.2M
Profitability Ratios
Gross Margin
70.5%
Operating Margin
50.9%
Net Margin
39.6%
ROE
11.6%
ROA
6.8%
FCF Margin
48.7%
Balance Sheet & Liquidity
Current Ratio
6.95x
Quick Ratio
3.93x
Debt/Equity
0.50x
Debt/Assets
41.3%
Interest Coverage
15.46x
Long-term Debt
196.9M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T08:54:31.527729 |
Data as of: 2026-03-31 |
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