Investment Thesis
Cleartronic demonstrates exceptional profitability metrics (86% gross margin, 15.6% net margin) and strong free cash flow generation ($115.5K FCF), but these gains appear unsustainable given the extreme 12,027% revenue spike and critically negative stockholders' equity of -$161.8K that indicates technical insolvency. The company's financial foundation is severely compromised despite near-term operational profitability, presenting a highly speculative investment with unclear growth sustainability.
Strengths
- Exceptional gross margin of 86% indicates strong pricing power or efficient operations
- Positive free cash flow generation of $115.5K with 9.2% FCF margin shows operational efficiency
- Strong interest coverage ratio of 19.3x suggests minimal near-term debt service concerns
- Substantial cash position of $1.3M relative to total assets of $1.7M provides liquidity buffer
Risks
- Negative stockholders' equity of -$161.8K indicates technical insolvency and accumulated losses
- Extreme 12,027% YoY revenue growth is highly anomalous and likely unsustainable, raising questions about revenue quality
- Total liabilities ($1.9M) exceed total assets ($1.7M) by $200K, indicating structural balance sheet weakness
- Current ratio of 1.09x shows minimal liquidity cushion; any operational disruption could trigger crisis
- Zero insider transactions in past 90 days may suggest lack of management confidence in company direction
Key Metrics to Watch
- Quarterly revenue sustainability and trend normalization from the extreme YoY spike
- Path to positive stockholders' equity and resolution of technical insolvency
- Operating cash flow consistency and free cash flow maintenance
- Cash balance depletion rate and runway given current burn dynamics
Financial Metrics
Revenue
1.3M
Net Income
194.8K
EPS (Diluted)
$0.00
Free Cash Flow
115.5K
Total Assets
1.7M
Cash
1.3M
Profitability Ratios
Gross Margin
86.0%
Operating Margin
15.6%
Net Margin
15.6%
ROE
N/A
ROA
11.4%
FCF Margin
9.2%
Balance Sheet & Liquidity
Current Ratio
1.09x
Quick Ratio
1.02x
Debt/Equity
N/A
Debt/Assets
109.5%
Interest Coverage
19.32x
Long-term Debt
12.6K
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: 2026-03-22T12:32:10.927640 |
Data as of: 2025-12-31 |
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