Investment Thesis
BRT Apartments is experiencing significant operational challenges with negative net income (-$11.9M) and operating margins (-12.9%), indicating the company is burning cash at the operating level despite positive operating cash flow. The heavily leveraged capital structure (3.52x debt-to-equity) combined with deteriorating profitability creates substantial financial stress, though modest revenue growth (+1.5%) and positive free cash flow provide limited cushion.
Strengths
- Positive free cash flow of $14.1M with 14.5% FCF margin provides near-term liquidity buffer
- Modest revenue growth of 1.5% YoY shows stable rental demand despite profitability challenges
- Operating cash flow of $14.1M exceeds net income loss, indicating non-cash charges are significant portion of losses
Risks
- Negative net income and operating margins indicate the business is unprofitable at core operational level
- Excessive leverage with 3.52x debt-to-equity ratio and $623.1M long-term debt against only $177.2M equity creates default risk
- Deteriorating earnings with net income down 5.2% YoY and diluted EPS declining 21.2% YoY signals worsening operational trends
- Limited cash reserves of only $25.1M relative to debt obligations and negative earnings
Key Metrics to Watch
- Operating cash flow sustainability and trend toward positive operating income
- Debt refinancing needs and interest coverage stabilization
- Occupancy rates and rental rate trends in apartment portfolio
- Capital expenditure requirements and maintenance needs for aging properties
Financial Metrics
Revenue
97.0M
Net Income
-11.9M
EPS (Diluted)
$-0.63
Free Cash Flow
14.1M
Total Assets
709.8M
Cash
25.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-12.9%
Net Margin
-12.3%
ROE
-6.7%
ROA
-1.7%
FCF Margin
14.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
3.52x
Debt/Assets
75.0%
Interest Coverage
N/A
Long-term Debt
623.1M
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: 2026-03-21T13:02:10.447399 |
Data as of: 2025-12-31 |
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