Investment Thesis
Boston Omaha Corp has a fortress balance sheet with low leverage (0.05x D/E) and 61.8% gross margins, but current operations are unprofitable with negative free cash flow (-$2.6M) despite positive operating cash flow. While YoY profitability trends are improving, the company cannot cover interest from operations, indicating structural operational challenges that must resolve before it becomes investable.
Strengths
- Strong balance sheet with low leverage (0.05x D/E) and $509.2M equity versus $173.0M liabilities
- Excellent gross margins at 61.8% demonstrate pricing power and product viability
- Improving profitability trend with net income improving 32.1% YoY despite remaining negative
- Solid liquidity position with 1.86x current ratio and $28.8M cash on hand
Risks
- Operating and net losses indicate fundamental unprofitability at the core business level
- Negative free cash flow (-$2.6M, -9.3% FCF margin) showing cash burn despite revenue growth
- Interest coverage ratio of -2.0x means operating income cannot service debt obligations
- Capital expenditures ($6.5M) exceed operating cash flow ($3.9M), unsustainable burn rate
Key Metrics to Watch
- Operating margin trajectory and path to profitability
- Free cash flow inflection point and ability to achieve positive FCF
- Gross margin stability as revenue scales
- Effective interest coverage and debt service capability
Financial Metrics
Revenue
28.2M
Net Income
-2.1M
EPS (Diluted)
$-0.07
Free Cash Flow
-2.6M
Total Assets
696.2M
Cash
28.8M
Profitability Ratios
Gross Margin
61.8%
Operating Margin
-7.7%
Net Margin
-7.6%
ROE
-0.4%
ROA
-0.3%
FCF Margin
-9.3%
Balance Sheet & Liquidity
Current Ratio
1.86x
Quick Ratio
1.86x
Debt/Equity
0.05x
Debt/Assets
24.8%
Interest Coverage
-1.96x
Long-term Debt
25.5M
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: 2026-05-15T08:49:27.335768 |
Data as of: 2026-03-31 |
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