Investment Thesis
Selectis Health exhibits severe financial distress with negative stockholders' equity of -$5.7M, indicating the company is technically insolvent. The company is unprofitable with negative operating and net margins, minimal liquidity (0.19x current ratio), and insufficient cash reserves ($417K) relative to debt obligations ($18.5M long-term debt). While operating cash flow is positive at $1.2M, this cannot offset the fundamental deterioration in financial position and lack of clear path to profitability.
Strengths
- Positive operating cash flow of $1.2M demonstrates some cash generation capability
- Revenue growth of 7.4% YoY shows modest top-line expansion
- Positive free cash flow of $851K provides limited financial flexibility
Risks
- Negative stockholders' equity of -$5.7M indicates technical insolvency and bankruptcy risk
- Critically low liquidity with current ratio of 0.19x creates immediate solvency concerns
- Persistent operating losses (-$1.2M) and negative net margins (-0.7%) with no clear profitability trajectory
- High leverage with $18.5M long-term debt versus only $417K cash, creating debt service vulnerability
- Negative interest coverage ratio (-0.5x) indicates inability to service debt from operations
Key Metrics to Watch
- Stockholders' equity trend - critical to monitor if returning to positive territory
- Operating margin improvement - must achieve profitability to reverse distress trajectory
- Liquidity position and cash burn rate - essential given minimal cash reserves
- Debt refinancing or restructuring activities - bankruptcy risk mitigation efforts
Financial Metrics
Revenue
31.8M
Net Income
-211.6K
EPS (Diluted)
$-0.08
Free Cash Flow
851.1K
Total Assets
33.3M
Cash
417.1K
Profitability Ratios
Gross Margin
N/A
Operating Margin
-3.7%
Net Margin
-0.7%
ROE
N/A
ROA
-0.6%
FCF Margin
2.7%
Balance Sheet & Liquidity
Current Ratio
0.19x
Quick Ratio
0.19x
Debt/Equity
N/A
Debt/Assets
117.0%
Interest Coverage
-0.54x
Long-term Debt
18.5M
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: 2026-03-25T14:00:10.825782 |
Data as of: 2025-09-30 |
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