Investment Thesis
Greif demonstrates solid profitability with a 25.8% operating margin and strong interest coverage of 150.9x, indicating excellent debt servicing capability. However, negative free cash flow of -$61.9M and a concerning -24.4M operating cash flow raise questions about cash generation quality and sustainability of operations, despite healthy reported net income.
Strengths
- Exceptional operating margin of 25.8% showing operational efficiency
- Strong interest coverage ratio of 150.9x indicating minimal financial distress risk
- Solid net margin of 17.6% with $174.6M in net income generation
- Conservative leverage with Debt/Equity of 0.22x providing financial flexibility
- Adequate liquidity position with $243.5M in cash and 1.23x current ratio
Risks
- Negative free cash flow of -$61.9M despite profitable operations suggests cash conversion issues
- Operating cash flow is negative at -$24.4M, indicating potential working capital problems
- Quick ratio of 0.94x below 1.0 threshold raises concerns about immediate liquidity
- Low ROE of 5.9% and ROA of 3.2% suggest inefficient asset utilization relative to capital base
- 37 Form 4 insider filings may indicate significant management trading activity worth monitoring
Key Metrics to Watch
- Operating cash flow trends and working capital management efficiency
- Free cash flow conversion and capital expenditure sustainability
- Return on equity improvement and asset turnover metrics
- Debt levels and covenant compliance given negative cash generation
- Insider trading patterns and motivations behind Form 4 filings
Financial Metrics
Revenue
994.8M
Net Income
174.6M
EPS (Diluted)
$0.00
Free Cash Flow
-61.9M
Total Assets
5.5B
Cash
243.5M
Profitability Ratios
Gross Margin
20.4%
Operating Margin
25.8%
Net Margin
17.6%
ROE
5.9%
ROA
3.2%
FCF Margin
-6.2%
Balance Sheet & Liquidity
Current Ratio
1.23x
Quick Ratio
0.94x
Debt/Equity
0.22x
Debt/Assets
0.0%
Interest Coverage
150.94x
Long-term Debt
655.1M
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: 2026-03-25T17:28:12.087747 |
Data as of: 2025-12-31 |
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