Investment Thesis
Dauch Corp exhibits severe financial distress with negative operating cash flow (-$64.4M), negative free cash flow (-$168M), and unprofitable operations (net income -$100.3M). The company carries excessive leverage (3.44x D/E) with an interest coverage ratio of -0.4x, indicating it cannot service debt obligations from operations. Flat revenue growth combined with deteriorating profitability and unsustainable cash burn creates material bankruptcy risk.
Strengths
- Maintains positive gross profit of $225.4M despite thin 9.5% margin
- Holds $1.0B in cash providing short-term liquidity buffer
- Established market position in motor vehicle parts sector with $2.4B annual revenue
Risks
- Negative operating cash flow of -$64.4M indicating operational losses cannot be sustained
- Critical debt service risk with interest coverage of -0.4x and $5.2B long-term debt versus $1.5B equity
- Unsustainable free cash flow of -$168M annually with limited runway before insolvency
- Zero revenue growth with deteriorating profitability and negative ROE/ROA
- Capex spending of $103.6M while operationally cash negative creates accelerating cash depletion
Key Metrics to Watch
- Operating cash flow trend and path to positive territory
- Free cash flow and cash runway timeline given current burn rate
- Gross margin stability and ability to improve operational leverage
- Debt refinancing capability and covenant compliance status
Financial Metrics
Revenue
2.4B
Net Income
-100.3M
EPS (Diluted)
$-0.52
Free Cash Flow
-168.0M
Total Assets
11.3B
Cash
1.0B
Profitability Ratios
Gross Margin
9.5%
Operating Margin
-1.4%
Net Margin
-4.2%
ROE
-6.7%
ROA
-0.9%
FCF Margin
-7.1%
Balance Sheet & Liquidity
Current Ratio
1.40x
Quick Ratio
1.04x
Debt/Equity
3.44x
Debt/Assets
86.7%
Interest Coverage
-0.38x
Long-term Debt
5.2B
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: 2026-05-09T07:56:16.548777 |
Data as of: 2026-03-31 |
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