Investment Thesis
Cannae Holdings is unprofitable with negative operating income of -22.1M and deteriorating margins (-33.4% net margin). The company is burning cash operationally (-21.2M OCF) while revenue declines 6.4% YoY, indicating fundamental business weakness. While balance sheet leverage is manageable, the core business is in distress and requires significant operational turnaround.
Strengths
- Low leverage with 0.07x debt-to-equity ratio provides financial flexibility
- Adequate liquidity with 135.7M cash and 1.71x current ratio for near-term obligations
- Manageable absolute debt of 70.3M relative to 958.9M equity base
Risks
- Severe profitability crisis: -33.4% net margin and -23.0% operating margin indicate fundamental operational failures
- Negative free cash flow of -23.0M means core operations are cash destructive; at current burn rate, 135.7M cash provides ~6 quarters runway
- Revenue declining 6.4% YoY combined with negative operating leverage creates death spiral risk; deteriorating EPS (-96.4% YoY) shows accelerating losses
Key Metrics to Watch
- Operating cash flow trajectory - must turn positive within 2-3 quarters to avoid liquidity crisis
- Revenue stabilization and margin recovery - need clear path to positive operating income
- Cash burn rate and remaining runway - current balance sheet provides limited buffer for continued losses
Financial Metrics
Revenue
96.2M
Net Income
-32.1M
EPS (Diluted)
$-0.70
Free Cash Flow
-23.0M
Total Assets
1.2B
Cash
135.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-23.0%
Net Margin
-33.4%
ROE
-3.3%
ROA
-2.6%
FCF Margin
-23.9%
Balance Sheet & Liquidity
Current Ratio
1.71x
Quick Ratio
1.65x
Debt/Equity
0.07x
Debt/Assets
25.6%
Interest Coverage
-4.80x
Long-term Debt
70.3M
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: 2026-05-13T08:09:12.654976 |
Data as of: 2026-03-31 |
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