Investment Thesis
Bausch Health operates with negative stockholders equity of -$2.1B, indicating balance sheet insolvency despite positive operating cash flow. The company cannot cover interest expenses from operations (interest coverage: -2.4x) and operates at a -37.6% operating margin with $20.8B in debt against $2.5B revenue. While 6.7% revenue growth and $121M free cash flow provide marginal sustainability near-term, the fundamental financial structure is unsustainable without major debt restructuring or asset disposition.
Strengths
- Revenue growing 6.7% year-over-year in pharmaceutical sector
- Operating cash flow of $230M and free cash flow of $121M remaining positive despite GAAP losses
- Current ratio of 1.32x provides near-term liquidity buffer with $1.3B cash on hand
Risks
- Negative stockholders equity of -$2.1B indicates balance sheet insolvency
- Long-term debt of $20.8B with interest coverage of -2.4x; company cannot service debt from operations
- Sustained operating losses (-$950M operating income) and negative net margin of -56.4% indicate core business economics are broken
- Liabilities exceed total assets by $1.1B; restructuring risk including potential bankruptcy or massive dilution
Key Metrics to Watch
- Operating income and operating margin trend toward breakeven
- Long-term debt reduction or refinancing success
- Stockholders equity trajectory; return to positive territory is critical
Financial Metrics
Revenue
2.5B
Net Income
-1.4B
EPS (Diluted)
$-3.82
Free Cash Flow
121.0M
Total Assets
24.5B
Cash
1.3B
Profitability Ratios
Gross Margin
N/A
Operating Margin
-37.6%
Net Margin
-56.4%
ROE
N/A
ROA
-5.8%
FCF Margin
4.8%
Balance Sheet & Liquidity
Current Ratio
1.32x
Quick Ratio
0.97x
Debt/Equity
N/A
Debt/Assets
104.4%
Interest Coverage
-2.36x
Long-term Debt
20.8B
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: 2026-05-06T14:29:45.184125 |
Data as of: 2026-03-31 |
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