Investment Thesis
DOMO is in severe financial distress with negative stockholders' equity of -$186.3M and a critical liquidity position (current ratio 0.31x). Stagnant revenue growth of 0.6% paired with deeply negative operating margins (-13.8%) and unprofitability (-17.8% net margin) suggest the business cannot self-fund its debt burden of $128.8M. While positive free cash flow provides temporary relief, the structural imbalance between liabilities and equity poses an acute solvency risk.
Strengths
- High gross margin of 73.7% indicates strong product pricing power and cost structure at the manufacturing level
- Positive operating cash flow of $5.2M and free cash flow of $3.3M demonstrate the business still generates cash despite net losses
- Revenue base of $79.4M provides some scale, though growth has stalled
Risks
- Negative stockholders' equity of -$186.3M represents technical insolvency; liabilities exceed total assets by $186.3M
- Critically low current ratio of 0.31x indicates severe liquidity stress and inability to meet short-term obligations without external capital
- Stagnant revenue growth of only 0.6% YoY combined with negative operating income (-$11.0M) and net loss (-$14.2M) indicates structural unprofitability
- High debt burden of $128.8M cannot be serviced from operations given negative operating income and no interest coverage capacity
- Operating margin deterioration at -13.8% suggests inability to control operating expenses relative to revenue
Key Metrics to Watch
- Quarterly revenue growth rate and sign of inflection toward profitability
- Operating cash flow sustainability given negative operating income; runway duration at current burn rate
- Current ratio trend and refinancing activity for short-term liabilities; ability to secure additional capital
Financial Metrics
Revenue
79.4M
Net Income
-14.2M
EPS (Diluted)
$-0.33
Free Cash Flow
3.3M
Total Assets
196.6M
Cash
39.1M
Profitability Ratios
Gross Margin
73.7%
Operating Margin
-13.8%
Net Margin
-17.8%
ROE
N/A
ROA
-7.2%
FCF Margin
4.2%
Balance Sheet & Liquidity
Current Ratio
0.31x
Quick Ratio
0.31x
Debt/Equity
N/A
Debt/Assets
194.8%
Interest Coverage
N/A
Long-term Debt
128.8M
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: 2026-06-16T07:07:09.463197 |
Data as of: 2026-04-30 |
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