Investment Thesis
Greenlight Capital RE demonstrates strong fundamental momentum with exceptional net income growth (+74.8%), healthy operating margins (41.3%), and a fortress balance sheet with minimal leverage (0.01x D/E). However, persistently low ROE of 4.8% suggests capital is not being deployed efficiently, requiring validation that earnings acceleration is sustainable and will improve shareholder returns.
Strengths
- Exceptional net income growth of 74.8% YoY paired with robust 41.3% operating margins
- Fortress balance sheet with minimal debt (0.01x D/E ratio) and strong interest coverage of 16.7x
- Solid free cash flow generation at 19.6% margin with low capital intensity
- Financial flexibility to capitalize on opportunities or return capital due to strong capital position
Risks
- Critically low ROE of 4.8% indicates poor capital efficiency and potential economic value destruction
- Sharp divergence between modest revenue growth (4.8%) and exceptional net income growth (74.8%) raises sustainability concerns
- Weak ROA of 1.6% reflects suboptimal asset utilization in this capital-intensive business
- Earnings surge may stem from non-recurring items or favorable insurance cycles rather than structural improvements
Key Metrics to Watch
- Return on Equity trend and trajectory toward acceptable capital efficiency levels
- Combined ratio and underwriting loss experience to validate profitability sustainability
- Net income composition breakdown between underwriting gains, investment income, and realized gains
Financial Metrics
Revenue
189.7M
Net Income
35.8M
EPS (Diluted)
$1.05
Free Cash Flow
37.2M
Total Assets
2.3B
Cash
75.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
41.3%
Net Margin
18.8%
ROE
4.8%
ROA
1.6%
FCF Margin
19.6%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.01x
Debt/Assets
67.3%
Interest Coverage
16.72x
Long-term Debt
4.7M
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: 2026-05-07T09:04:18.269137 |
Data as of: 2026-03-31 |
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