Investment Thesis
Peabody Energy exhibits severe operational distress with negative net income (-$32.4M) and catastrophic free cash flow (-$381.4M) despite massive revenue growth, indicating unsustainable capex spending relative to profitability. The company is burning substantial cash while operating at loss margins across all profitability metrics, coupled with secular headwinds in the declining coal sector.
Strengths
- Strong balance sheet with low leverage (Debt/Equity of 0.09x)
- Healthy liquidity position (Current Ratio 1.87x, Quick Ratio 1.37x)
- Adequate cash reserves ($492.5M) providing runway
Risks
- Negative free cash flow of -$381.4M indicating severe cash burn relative to operations
- Unprofitable operations with negative operating income (-$44.2M) and contracting net income (-24.5% YoY decline)
- Unsustainable capital expenditure ($411.4M) far exceeding operating cash flow ($30.0M)
- Secular decline in coal demand and energy transition headwinds
- All profitability metrics negative (Operating Margin -4.5%, Net Margin -3.3%, ROE -0.9%, ROA -0.6%)
Key Metrics to Watch
- Free cash flow trend and capex justification
- Operating margin improvement and path to profitability
- Coal price realizations and volume trends
- Cash burn rate and liquidity runway
- Operating cash flow sustainability
Financial Metrics
Revenue
973.3M
Net Income
-32.4M
EPS (Diluted)
$-0.27
Free Cash Flow
-381.4M
Total Assets
5.7B
Cash
492.5M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-4.5%
Net Margin
-3.3%
ROE
-0.9%
ROA
-0.6%
FCF Margin
-39.2%
Balance Sheet & Liquidity
Current Ratio
1.87x
Quick Ratio
1.37x
Debt/Equity
0.09x
Debt/Assets
38.0%
Interest Coverage
-4.13x
Long-term Debt
320.9M
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: 2026-05-07T08:15:14.836187 |
Data as of: 2026-03-31 |
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