Investment Thesis
Alexander & Baldwin demonstrates solid financial fundamentals with strong profitability margins (38.7% operating, 31.3% net) and conservative leverage (0.50x debt/equity). However, concerning revenue decline of 12.7% YoY and modest FCF margin of 13.2% suggest operational headwinds that warrant caution despite healthy balance sheet metrics.
Strengths
- Strong operating margins (38.7%) and net margins (31.3%) indicate efficient cost management
- Conservative capital structure with 0.50x debt/equity ratio and 14.5x interest coverage providing financial flexibility
- Positive free cash flow generation of $27.3M with healthy operating cash flow of $79.5M
- Solid balance sheet with stockholders equity of $987.2M and manageable debt burden
Risks
- Significant revenue contraction of 12.7% YoY raises concerns about business segment performance and market conditions
- Low cash position of only $11.3M relative to $1.7B assets may limit operational flexibility
- Modest ROE of 6.6% and ROA of 3.9% suggest limited returns on deployed capital
- FCF margin of 13.2% is relatively thin for a REIT, indicating limited cash generation relative to revenue
Key Metrics to Watch
- Revenue stabilization and growth trajectory to reverse YoY decline
- Free cash flow sustainability and dividend coverage ratios
- Operating margin maintenance amid revenue headwinds
Financial Metrics
Revenue
206.7M
Net Income
64.7M
EPS (Diluted)
$0.89
Free Cash Flow
27.3M
Total Assets
1.7B
Cash
11.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
38.7%
Net Margin
31.3%
ROE
6.6%
ROA
3.9%
FCF Margin
13.2%
Balance Sheet & Liquidity
Current Ratio
1.40x
Quick Ratio
1.16x
Debt/Equity
0.50x
Debt/Assets
40.5%
Interest Coverage
14.52x
Long-term Debt
491.6M
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: 2026-03-19T18:04:21.334770 |
Data as of: 2025-12-31 |
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