Investment Thesis
Ball Corp exhibits severe operational stress despite 11.6% revenue growth, with negative operating cash flow of -$777M and negative free cash flow of -$938M indicating the company is not converting sales into cash. High leverage (1.25x D/E) combined with weak liquidity (1.12x current ratio) and thin margins (5.4% operating) creates unsustainable financial dynamics that pose significant solvency risks given the 2.5x interest coverage ratio.
Strengths
- Top-line revenue growth of 11.6% year-over-year demonstrates market demand
- Positive net income of $205M shows accounting profitability
- Maintained $730M in cash equivalents provides short-term liquidity cushion
Risks
- Negative operating cash flow of -$777M: company burning cash despite profitability, indicating structural operational issues
- Negative free cash flow of -$938M unsustainable with $7.0B long-term debt; debt service at risk
- Excessive leverage (1.25x D/E, 2.5x interest coverage) leaves minimal room for operational disruption
- Critically weak liquidity with quick ratio of 0.72x and minimal working capital buffer
- Severe margin compression: 5.4% operating margin with thin 13.3% gross margins suggests pricing power erosion
- Dramatic 74.6% EPS decline despite flat net income indicates significant share dilution
Key Metrics to Watch
- Operating cash flow trend and quarterly cash position relative to debt obligations
- Working capital management and inventory/receivables dynamics causing cash burn
- Debt covenant compliance and refinancing requirements over next 12-24 months
- Gross and operating margin stabilization or further deterioration
Financial Metrics
Revenue
3.6B
Net Income
205.0M
EPS (Diluted)
$0.77
Free Cash Flow
-938.0M
Total Assets
19.8B
Cash
730.0M
Profitability Ratios
Gross Margin
13.3%
Operating Margin
5.4%
Net Margin
5.7%
ROE
3.7%
ROA
1.0%
FCF Margin
-26.0%
Balance Sheet & Liquidity
Current Ratio
1.12x
Quick Ratio
0.72x
Debt/Equity
1.25x
Debt/Assets
71.6%
Interest Coverage
2.51x
Long-term Debt
7.0B
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: 2026-05-07T08:07:53.097201 |
Data as of: 2026-03-31 |
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