Investment Thesis
CMCO is in severe financial distress despite strong 23.9% revenue growth, indicating integration or operational failure. Negative operating cash flow of -146.2M, negative free cash flow of -164.1M, and deeply underwater profitability (-19.2% net margin) make debt service unsustainable. Elevated leverage (1.64x D/E, 2.4B debt vs. 1.4B equity) combined with negative interest coverage (-4.1x) creates material bankruptcy risk.
Strengths
- Revenue growth of 23.9% YoY shows top-line expansion
- Gross profit of 359.4M with 30.1% gross margin indicates reasonable underlying product profitability
- Adequate short-term liquidity with 2.02x current ratio
Risks
- Operating losses of -119.3M and net losses of -229.5M despite revenue growth indicate fundamental operational failure or major one-time charges
- Negative operating cash flow (-146.2M) and free cash flow (-164.1M) unsustainable; cannot service 2.4B debt from operations
- Extreme leverage with 1.64x debt-to-equity and negative interest coverage ratio of -4.1x; restructuring or capital raising likely imminent
- Quality of growth suspect given profitability collapse; likely acquisition integration issues, pricing pressure, or structural cost problems
Key Metrics to Watch
- Operating cash flow trajectory and return to positive territory
- Operating margin recovery path and explanation for loss drivers
- Debt refinancing activity and covenant compliance status
Financial Metrics
Revenue
1.2B
Net Income
-229.5M
EPS (Diluted)
$-7.40
Free Cash Flow
-164.1M
Total Assets
4.8B
Cash
96.6M
Profitability Ratios
Gross Margin
30.1%
Operating Margin
-10.0%
Net Margin
-19.2%
ROE
-15.8%
ROA
-4.8%
FCF Margin
-13.7%
Balance Sheet & Liquidity
Current Ratio
2.02x
Quick Ratio
0.98x
Debt/Equity
1.64x
Debt/Assets
69.7%
Interest Coverage
-4.15x
Long-term Debt
2.4B
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: 2026-06-09T07:22:04.797257 |
Data as of: 2026-03-31 |
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