Investment Thesis
Altisource Portfolio Solutions exhibits severe financial distress with negative stockholders' equity of -$110.2M, negative operating cash flow of -$5.1M, and crushing debt burden of $191.1M against total assets of only $139.8M. The company is technically insolvent on a book value basis and consuming cash operationally despite modest revenue growth, indicating structural business challenges that make debt service unsustainable.
Strengths
- Revenue growth of 6.8% YoY demonstrates modest top-line expansion in a challenging sector
- Gross margin of 28.6% shows reasonable unit economics before operating expenses
- Positive net income of $1.6M achieved despite operational headwinds
Risks
- Negative stockholders' equity of -$110.2M indicates company is technically insolvent on a book value basis
- Operating cash flow is negative at -$5.1M while long-term debt is $191.1M, creating unsustainable debt burden
- Operating margin of only 0.2% and net margin of 0.9% provide minimal cushion; any revenue decline would produce losses
- Interest coverage ratio of 0.0x indicates inability to service debt from operating income
- Negative free cash flow means company is burning cash despite positive accounting earnings
Key Metrics to Watch
- Operating cash flow trajectory - must return to positive to validate business model
- Stockholders' equity recovery - needs significant improvement from -$110.2M to avoid delisting risk
- Debt reduction progress - long-term debt of $191.1M must be materially reduced given asset base
- Operating margin expansion - 0.2% margin is insufficient and vulnerable to revenue volatility
Financial Metrics
Revenue
171.0M
Net Income
1.6M
EPS (Diluted)
$0.15
Free Cash Flow
-5.1M
Total Assets
139.8M
Cash
26.6M
Profitability Ratios
Gross Margin
28.6%
Operating Margin
0.2%
Net Margin
0.9%
ROE
N/A
ROA
1.2%
FCF Margin
-3.0%
Balance Sheet & Liquidity
Current Ratio
1.15x
Quick Ratio
1.15x
Debt/Equity
N/A
Debt/Assets
0.0%
Interest Coverage
0.04x
Long-term Debt
191.1M
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: 2026-03-20T06:38:10.547200 |
Data as of: 2025-12-31 |
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