Investment Thesis
Femasys exhibits severe financial distress with massive operating losses (-$13.0M on $1.5M revenue) and deeply negative cash flow (-$14.9M), indicating the company is burning cash at an unsustainable rate. Despite 52% revenue growth, the company lacks profitability at every level and is operating far from cash flow breakeven, with only 4.6 months of cash runway at current burn rates. The negative gross margin contribution to fixed costs and complete absence of path to profitability present extreme risk of capital insufficiency.
Strengths
- Revenue growing 52% year-over-year showing market traction for products
- Positive gross margin of 37.6% indicates underlying product economics are viable
- No long-term debt providing some balance sheet flexibility and avoiding interest burden
Risks
- Catastrophic operating losses of -$13.0M against only $1.5M revenue indicating massive operating expense structure misalignment
- Severely negative free cash flow of -$14.9M with only $4.6M cash equivalents, suggesting approximately 3.7 months of runway at current burn rate
- Net margin of -991.8% and operating margin of -876.1% indicate company is nowhere near unit economics breakeven despite revenue growth
- Negative interest coverage of -35.9x reflects inability to service any debt obligations
- Rapid cash depletion threatens ability to fund operations and R&D within 12 months without capital raise or dramatic expense reduction
Key Metrics to Watch
- Operating cash flow trajectory and time to cash depletion at current burn rate
- Quarterly revenue growth sustainability and gross margin consistency
- Operating expense reduction initiatives and path to operating breakeven
- Cash balance and timing of any equity raises or financing events
- Customer acquisition cost relative to lifetime value and unit economics
- Capital expenditure requirements for manufacturing scaling
Financial Metrics
Revenue
1.5M
Net Income
-14.7M
EPS (Diluted)
$-0.46
Free Cash Flow
-14.9M
Total Assets
16.3M
Cash
4.6M
Profitability Ratios
Gross Margin
37.6%
Operating Margin
-876.1%
Net Margin
-991.8%
ROE
-322.1%
ROA
-90.1%
FCF Margin
-1,006.2%
Balance Sheet & Liquidity
Current Ratio
1.16x
Quick Ratio
0.61x
Debt/Equity
0.00x
Debt/Assets
72.0%
Interest Coverage
-35.86x
Long-term Debt
N/A
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: 2026-03-24T20:34:13.084250 |
Data as of: 2025-09-30 |
Powered by Claude AI