Investment Thesis
APTARGROUP maintains solid financial stability with exceptional 92.2% gross margins, healthy leverage (0.43x debt/equity), and positive free cash flow ($53.3M). However, flat year-over-year revenue and net income growth combined with poor capital efficiency (2.8% ROE, 1.4% ROA) indicate operational stagnation despite strong balance sheet fundamentals.
Strengths
- Exceptional 92.2% gross margin demonstrates pricing power and manufacturing efficiency
- Strong financial health with 10.6x interest coverage, 0.43x debt/equity, and 1.66x current ratio
- Positive free cash flow generation of $53.3M with operating cash flow of $118.7M
- 6.5% EPS growth despite flat net income reflects disciplined capital allocation
- Adequate liquidity with $222.5M cash and solid quick ratio of 1.14x
Risks
- Zero revenue growth (0% YoY) indicates market stagnation and lack of expansion
- Critically low returns on capital (2.8% ROE, 1.4% ROA) signal severe operational inefficiency
- 32.8% gap between gross margin (92.2%) and operating margin (10.9%) suggests structural cost issues
- Flat net income (0% YoY) despite positive cash flow limits shareholder value creation
- Unusual insider activity (47 Form 4 filings in 90 days) may indicate management concern or uncertainty
Key Metrics to Watch
- Revenue growth acceleration - critical turnaround indicator
- Operating margin improvement - must reduce operating expense burden
- Return on equity trajectory - urgently needs improvement from 2.8% baseline
- Free cash flow sustainability - ensure cash generation persists
- Insider transaction direction - clarify whether filings represent buying or selling activity
Financial Metrics
Revenue
982.9M
Net Income
72.7M
EPS (Diluted)
$1.12
Free Cash Flow
53.3M
Total Assets
5.1B
Cash
222.5M
Profitability Ratios
Gross Margin
92.2%
Operating Margin
10.9%
Net Margin
7.4%
ROE
2.8%
ROA
1.4%
FCF Margin
5.4%
Balance Sheet & Liquidity
Current Ratio
1.66x
Quick Ratio
1.14x
Debt/Equity
0.43x
Debt/Assets
0.0%
Interest Coverage
10.56x
Long-term Debt
1.1B
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: 2026-05-06T16:58:37.883347 |
Data as of: 2026-03-31 |
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