Investment Thesis
Clarivate faces severe financial distress with interest coverage of only 0.1x, indicating inability to service $4.3B debt from operating income. Revenue declining 4% YoY combined with negative net income and current ratio below 1.0x signal deteriorating financial health, despite positive free cash flow providing temporary relief.
Strengths
- Positive operating cash flow of $134.7M and free cash flow of $78.9M
- Operating income remains positive at $30.2M with 5.2% operating margin
- Established position in high-value data/analytics sector with stable demand
Risks
- Interest coverage of 0.1x indicates inability to cover debt service from operations
- Current ratio of 0.84x signals liquidity stress with liabilities exceeding current assets
- Revenue declining 4% YoY while carrying $4.3B debt at 0.89x leverage ratio
- Net loss of -$40.2M with negative ROE and ROA demonstrates unprofitable operations
Key Metrics to Watch
- Interest coverage ratio recovery toward minimum 1.5x level
- Revenue stabilization and return to growth
- Current ratio improvement above 1.0x
- Net income path to profitability and debt reduction progress
Financial Metrics
Revenue
585.5M
Net Income
-40.2M
EPS (Diluted)
$-0.06
Free Cash Flow
78.9M
Total Assets
10.9B
Cash
242.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
5.2%
Net Margin
-6.9%
ROE
-0.8%
ROA
-0.4%
FCF Margin
13.5%
Balance Sheet & Liquidity
Current Ratio
0.84x
Quick Ratio
0.84x
Debt/Equity
0.89x
Debt/Assets
56.2%
Interest Coverage
0.10x
Long-term Debt
4.3B
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: 2026-05-06T14:43:14.733032 |
Data as of: 2026-03-31 |
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