Investment Thesis
CPI Aerostructures is experiencing severe operational deterioration with negative operating income, negative free cash flow, and declining revenue. The company is burning cash despite maintaining adequate liquidity, indicating unsustainable current operations that threaten long-term viability without significant operational turnaround.
Strengths
- Adequate liquidity with current ratio of 1.61x and quick ratio of 1.59x
- Minimal debt burden with debt-to-equity ratio near zero
- Moderate insider activity with 8 Form 4 filings suggesting some management engagement
Risks
- Negative operating income of -1.4M with operating margin of -2.9% indicates core business is unprofitable
- Negative free cash flow of -3.2M and operating cash flow of -3.1M demonstrates cash burn rate exceeds operations
- Revenue declining 6.2% year-over-year in aerospace/defense sector suggests loss of market share or reduced demand
- Negative net income and ROE/ROA metrics indicate shareholder value destruction
- Eroding gross margins at 13.3% provide limited cushion for operational expenses
Key Metrics to Watch
- Operating cash flow trend - critical to assess if cash burn is stabilizing
- Revenue trajectory - whether revenue decline stabilizes or accelerates
- Gross margin sustainability - key to achieving operating profitability
- Cash and equivalents depletion rate - runway until liquidity crisis
- Operating margin improvement - path to profitability essential for viability
Financial Metrics
Revenue
49.8M
Net Income
-1.5M
EPS (Diluted)
$-0.12
Free Cash Flow
-3.2M
Total Assets
74.1M
Cash
546.6K
Profitability Ratios
Gross Margin
13.3%
Operating Margin
-2.9%
Net Margin
-3.1%
ROE
-6.1%
ROA
-2.1%
FCF Margin
-6.4%
Balance Sheet & Liquidity
Current Ratio
1.61x
Quick Ratio
1.59x
Debt/Equity
0.00x
Debt/Assets
66.3%
Interest Coverage
-0.62x
Long-term Debt
26.5K
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: 2026-03-23T06:40:10.801912 |
Data as of: 2025-09-30 |
Powered by Claude AI