Investment Thesis
Finwise demonstrates strong top-line growth (28.1% YoY) and exceptional free cash flow generation (58.7% margin), but severely depressed returns on capital (ROE 1.4%, ROA 0.3%) and significant margin compression indicate underlying operational challenges. Net income growth of only 4.6% against 28% revenue growth raises concerns about earnings quality and sustainability.
Strengths
- Strong revenue growth of 28.1% year-over-year demonstrating market traction
- Excellent free cash flow generation at 58.7% margin relative to revenue
- Zero leverage with no long-term debt and healthy equity position of $196.6M
Risks
- Severely depressed returns on equity (1.4%) and assets (0.3%) indicating poor capital deployment efficiency
- Material margin compression with net income growing only 4.6% while revenue grows 28.1%, suggesting cost pressures or credit issues
- Tight interest coverage ratio of 1.0x provides minimal buffer for adverse conditions or rising funding costs
Key Metrics to Watch
- Return on equity trend and underlying profitability drivers
- Net income margin sustainability and the cause of divergence from revenue growth
- Interest coverage ratio improvement and net interest margin evolution
Financial Metrics
Revenue
33.5M
Net Income
2.7M
EPS (Diluted)
$0.20
Free Cash Flow
19.7M
Total Assets
899.4M
Cash
96.9M
Profitability Ratios
Gross Margin
N/A
Operating Margin
11.3%
Net Margin
8.2%
ROE
1.4%
ROA
0.3%
FCF Margin
58.7%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
78.1%
Interest Coverage
1.04x
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: 2026-05-13T06:33:45.132361 |
Data as of: 2026-03-31 |
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