Investment Thesis
CrossAmerica Partners is in financial distress despite net income improvements. Negative stockholders' equity, severe liquidity crisis (current ratio 0.75x), and $732M debt burden with only $7.3M cash create unsustainable capital structure. Declining revenue and razor-thin margins (1.3% net) in commodity wholesale offer limited cushion for debt service.
Strengths
- Net income surged 86.3% YoY with EPS growth of 96.2%, indicating operational improvements
- Positive free cash flow generation of $24.5M provides near-term debt service capacity
- Interest coverage ratio of 2.2x suggests current ability to meet debt obligations
Risks
- Negative/critically weak stockholders' equity indicates technical insolvency and financial distress
- Liquidity crisis: current ratio 0.75x and quick ratio 0.36x insufficient for liabilities exceeding $1.1B
- Revenue declined 10.6% YoY amid volatile petroleum markets, compressing already-thin margins
- Extreme leverage with $732M long-term debt against $7.3M cash and $24.5M annual FCF unsustainable long-term
- Net margin of 1.3% leaves minimal operational flexibility for market downturns or unexpected costs
Key Metrics to Watch
- Stockholders' equity recovery and debt reduction trajectory
- Operating cash flow sustainability relative to debt service obligations
- Current ratio improvement and cash position strengthening
- Revenue stabilization in wholesale petroleum segment
- Interest coverage ratio maintenance above 2.0x
Financial Metrics
Revenue
841.8M
Net Income
10.7M
EPS (Diluted)
$0.26
Free Cash Flow
24.5M
Total Assets
1.0B
Cash
7.3M
Profitability Ratios
Gross Margin
11.6%
Operating Margin
2.8%
Net Margin
1.3%
ROE
N/A
ROA
1.1%
FCF Margin
2.9%
Balance Sheet & Liquidity
Current Ratio
0.75x
Quick Ratio
0.36x
Debt/Equity
N/A
Debt/Assets
107.8%
Interest Coverage
2.21x
Long-term Debt
732.0M
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: 2026-05-08T09:29:25.835876 |
Data as of: 2026-03-31 |
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