Investment Thesis
Blue Star Foods is in severe financial distress with negative stockholders' equity of -$1.7M, indicating liabilities exceed assets. The company is burning cash with operating and free cash flows both deeply negative, while operating losses of -$1.9M on just $2.6M revenue demonstrate fundamental business model problems. Without immediate operational turnaround or capital injection, the company faces insolvency risk.
Strengths
- Gross margin of 29.8% suggests some product pricing power and production efficiency
- Minimal capital expenditure requirements indicate low fixed investment needs
- Small revenue base leaves room for growth if operations can be stabilized
Risks
- Negative stockholders' equity of -$1.7M indicates technical insolvency and balance sheet deterioration
- Operating margin of -72.4% shows the company loses $0.72 for every dollar of revenue generated
- Operating cash flow of -$372.1K and free cash flow of -$382.0K indicate rapid cash depletion with only $82.8K remaining
- Current ratio of 0.38x shows severe liquidity crisis with insufficient current assets to cover current liabilities
- Net margin of -89.9% demonstrates the business is fundamentally unprofitable
- Negative interest coverage of -3.9x indicates inability to service debt obligations from operations
Key Metrics to Watch
- Cash balance depletion rate - critical given only ~3 weeks of cash runway at current burn rate
- Operating income trend - must achieve positive operating income to avoid insolvency
- Revenue stabilization and growth - current $2.6M annualized revenue insufficient to support cost structure
Financial Metrics
Revenue
2.6M
Net Income
-2.3M
EPS (Diluted)
$-0.12
Free Cash Flow
-382.0K
Total Assets
1.3M
Cash
82.8K
Profitability Ratios
Gross Margin
29.8%
Operating Margin
-72.4%
Net Margin
-89.9%
ROE
N/A
ROA
-183.1%
FCF Margin
-14.7%
Balance Sheet & Liquidity
Current Ratio
0.38x
Quick Ratio
0.34x
Debt/Equity
N/A
Debt/Assets
233.4%
Interest Coverage
-3.88x
Long-term Debt
258.3K
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: 2026-03-21T13:48:10.563107 |
Data as of: 2025-09-30 |
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