Investment Thesis
Allurion Technologies exhibits severe financial distress with negative stockholders' equity of -$82.9M, indicating the company is technically insolvent. The company is burning cash at an unsustainable rate (-$24.2M free cash flow) while generating only $11.6M in revenue, demonstrating a fundamental mismatch between operations and business model viability. Without immediate operational profitability or significant capital injection, the company faces existential liquidity challenges.
Strengths
- Strong gross margin of 68.5% indicates the core product has inherent profitability potential
- Adequate current ratio of 1.26x provides near-term liquidity buffer
- Operating in specialized medical device sector with addressable market opportunity
Risks
- Negative stockholders' equity of -$82.9M represents technical insolvency and equity wipeout risk
- Operating cash burn of -$23.6M annually with only $6.1M cash on hand creates acute solvency risk
- Operating margin of -205.4% and net margin of -195.6% indicate business model cannot support current cost structure; revenue would need to triple just to approach breakeven
- Long-term debt of $47.2M against negative equity and negative cash flow creates refinancing risk
- No insider purchases in last 90 days despite distressed valuation suggests lack of management confidence
Key Metrics to Watch
- Quarterly revenue growth rate and path to $50M+ annual revenue needed for viability
- Monthly cash burn rate and runway to profitability or capital raise deadline
- Gross margin sustainability and operating expense reduction progress toward 50%+ net margins
Financial Metrics
Revenue
11.6M
Net Income
-22.7M
EPS (Diluted)
$-3.43
Free Cash Flow
-24.2M
Total Assets
18.1M
Cash
6.1M
Profitability Ratios
Gross Margin
68.5%
Operating Margin
-205.4%
Net Margin
-195.6%
ROE
N/A
ROA
-125.2%
FCF Margin
-208.6%
Balance Sheet & Liquidity
Current Ratio
1.26x
Quick Ratio
0.94x
Debt/Equity
N/A
Debt/Assets
557.1%
Interest Coverage
-10.51x
Long-term Debt
47.2M
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: 2026-03-19T18:06:48.253883 |
Data as of: 2025-09-30 |
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