Investment Thesis
Allient demonstrates weak operational fundamentals with net margins of 3.9% and severely inadequate returns on capital (ROE 1.8%, ROA 0.9%), indicating poor capital efficiency despite 4.6% revenue growth. While the balance sheet is solid with strong liquidity and moderate leverage, deteriorating profitability quality—flat earnings despite revenue expansion and minimal free cash flow generation (2.9% FCF margin)—signals fundamental operational challenges that outweigh the stability of the financial position.
Strengths
- Strong liquidity position with 3.73x current ratio and 2.15x quick ratio provides operational flexibility
- Moderate leverage at 0.58x debt-to-equity maintains balance sheet stability
- Positive revenue growth of 4.6% YoY and profitability at $5.4M net income
Risks
- Severely depressed profitability: net margin 3.9%, gross margin 32.7% indicating cost structure problems
- Abysmal capital returns: ROE 1.8% and ROA 0.9% suggest capital is not deployed efficiently
- Weak cash generation: FCF margin 2.9% on $138.9M revenue with operating cash flow only $6.2M
- Earnings growth stalled: net income flat (0% YoY) while revenue grew 4.6%, indicating margin compression
Key Metrics to Watch
- Operating margin trend and gross margin expansion/contraction
- Free cash flow generation relative to capital expenditure requirements
- Return on equity improvement and asset utilization efficiency
Financial Metrics
Revenue
138.9M
Net Income
5.4M
EPS (Diluted)
$0.32
Free Cash Flow
4.0M
Total Assets
577.7M
Cash
41.2M
Profitability Ratios
Gross Margin
32.7%
Operating Margin
6.7%
Net Margin
3.9%
ROE
1.8%
ROA
0.9%
FCF Margin
2.9%
Balance Sheet & Liquidity
Current Ratio
3.73x
Quick Ratio
2.15x
Debt/Equity
0.58x
Debt/Assets
47.0%
Interest Coverage
2.75x
Long-term Debt
177.3M
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: 2026-05-08T09:00:11.097748 |
Data as of: 2026-03-31 |
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