Investment Thesis
CYH faces severe financial distress with negative stockholders' equity of -$1.5B, negative operating cash flow of -$297M, and interest coverage of only 0.4x, indicating inability to service $10.1B debt from operations. Declining revenue and deepening losses signal structural deterioration, with elevated default and restructuring risk.
Strengths
- Maintains adequate short-term liquidity with 1.47x current ratio providing operational runway
- Operating margin of 9.5% demonstrates core operations still generate some profitability before debt service
- $712M cash balance provides temporary buffer against operational cash burn
Risks
- Negative stockholders' equity of -$1.5B indicates technical insolvency on book value basis
- Negative operating cash flow of -$297M reveals inability to generate cash from core operations
- Interest coverage ratio of 0.4x far below safe levels; cannot service debt obligations from operating income
- Negative free cash flow of -$373M unsustainable with current $10.1B debt load and burn rate
- Revenue decline of -1.2% YoY and net income deterioration of -24.7% suggest structural market challenges
- Massive debt burden relative to equity creates covenant violation and debt restructuring risk
Key Metrics to Watch
- Operating cash flow - must turn positive to validate sustainability
- Interest coverage ratio - critical to improve above 1.0x
- Stockholders' equity - return to positive territory essential
- Revenue and patient volume trends - assess core demand fundamentals
- Debt refinancing schedule and covenant compliance status
- Free cash flow trajectory - assess runway given current burn rate
Financial Metrics
Revenue
3.0B
Net Income
-58.0M
EPS (Diluted)
$-0.43
Free Cash Flow
-373.0M
Total Assets
13.2B
Cash
712.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
9.5%
Net Margin
-2.0%
ROE
N/A
ROA
-0.4%
FCF Margin
-12.6%
Balance Sheet & Liquidity
Current Ratio
1.47x
Quick Ratio
1.47x
Debt/Equity
N/A
Debt/Assets
107.3%
Interest Coverage
0.39x
Long-term Debt
10.1B
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: 2026-04-29T13:15:25.155889 |
Data as of: 2026-03-31 |
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