Investment Thesis
Crane NXT exhibits severe operational stress with negative operating cash flow (-$14.0M) and deeply negative free cash flow (-$57.2M), indicating the company cannot convert revenue into cash despite 11.4% YoY growth. Razor-thin net margins (1.7%), minimal returns on equity (0.5%), and dangerously low interest coverage (1.3x) reveal a business model under extreme pressure with insufficient debt service capacity.
Strengths
- Revenue growth of 11.4% YoY shows top-line expansion
- Maintains $228.3M in cash providing near-term liquidity buffer
- Current ratio of 1.33x indicates acceptable near-term working capital
Risks
- Operating cash flow is negative (-$14.0M); company burns cash despite positive revenue
- Free cash flow is severely negative (-$57.2M, -14.8% FCF margin); unsustainable burn rate
- Interest coverage ratio of 1.3x is critically low with minimal debt service cushion
- Net profit margin of 1.7% is unsustainably thin; operational efficiency is severely compromised
- ROE of 0.5% and ROA of 0.2% demonstrate capital is not productively deployed
- Quick ratio of 0.99x indicates potential liquidity stress when excluding inventory
- Debt/Equity ratio of 1.02x leaves minimal financial flexibility with high leverage
Key Metrics to Watch
- Operating cash flow trend - must return to positive to validate turnaround
- Free cash flow sustainability - current burn rate is unsustainable
- Interest coverage ratio - any decline below 1.3x signals default risk
- Net profit margin expansion - critical to prove operational viability
Financial Metrics
Revenue
387.7M
Net Income
6.4M
EPS (Diluted)
$0.11
Free Cash Flow
-57.2M
Total Assets
3.6B
Cash
228.3M
Profitability Ratios
Gross Margin
320.1%
Operating Margin
5.7%
Net Margin
1.7%
ROE
0.5%
ROA
0.2%
FCF Margin
-14.8%
Balance Sheet & Liquidity
Current Ratio
1.33x
Quick Ratio
0.99x
Debt/Equity
1.02x
Debt/Assets
65.4%
Interest Coverage
1.31x
Long-term Debt
1.3B
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: 2026-05-08T09:51:33.338068 |
Data as of: 2026-03-31 |
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