Investment Thesis
Domo exhibits severe financial distress with negative stockholders' equity of -$191.9M, indicating the company has lost more than its net worth. Despite strong gross margins of 74.4%, the company is unprofitable with -21.5% net margins and critically weak liquidity (0.49x current ratio), creating imminent solvency concerns. Minimal revenue growth (-0.6% YoY) combined with persistent operating losses (-$28.5M) and high debt burden ($124.2M) suggest structural business challenges that require urgent resolution.
Strengths
- Strong gross margin of 74.4% demonstrates pricing power and efficient cost of goods sold management
- Positive operating cash flow of $10.7M provides some near-term breathing room despite net losses
- Software-as-a-Service business model with recurring revenue potential remains intact
Risks
- Negative stockholders' equity of -$191.9M indicates technical insolvency and significant shareholder dilution risk
- Critical liquidity crisis with current ratio of 0.49x - liabilities exceed current assets by 2x, creating going concern questions
- Stalled revenue growth (-0.6% YoY) combined with operating losses (-$28.5M) and high debt servicing costs ($124.2M long-term debt) threaten financial viability
- Persistent net losses (-$51.4M) and negative ROA of -25.5% indicate operational model is destroying shareholder value
Key Metrics to Watch
- Quarterly revenue growth trajectory and customer retention metrics
- Path to operating profitability and operating margin expansion
- Debt refinancing events and covenant compliance status
- Cash burn rate and runway given current cash position of $47.9M
Financial Metrics
Revenue
239.2M
Net Income
-51.4M
EPS (Diluted)
$-1.26
Free Cash Flow
3.1M
Total Assets
201.6M
Cash
47.9M
Profitability Ratios
Gross Margin
74.4%
Operating Margin
-11.9%
Net Margin
-21.5%
ROE
N/A
ROA
-25.5%
FCF Margin
1.3%
Balance Sheet & Liquidity
Current Ratio
0.49x
Quick Ratio
0.49x
Debt/Equity
N/A
Debt/Assets
195.2%
Interest Coverage
N/A
Long-term Debt
124.2M
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: 2026-03-23T17:02:10.943659 |
Data as of: 2025-10-31 |
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