Investment Thesis
Goodyear is in acute financial distress with negative operating cash flow (-$718M), negative free cash flow (-$893M), and inability to cover interest costs from operations. The combination of declining revenue (-3.2% YoY), operational losses, excessive leverage (2.08x debt/equity), and deteriorating liquidity (0.51x quick ratio) creates material bankruptcy risk within 12 months at current burn rates.
Strengths
- Maintains $723M cash reserve providing near-term liquidity buffer
- Established 100+ year brand with diversified customer base
- Total assets of $18.5B provide theoretical liquidation value
Risks
- Negative operating cash flow indicates core business cannot sustain operations independently
- Free cash flow burn of -$893M with only 9-10 months of cash runway at current rates
- Interest coverage ratio of -1.6x means company cannot service $6.2B debt from operations; refinancing risk is critical
- Quick ratio of 0.51x signals acute liquidity crisis; insufficient liquid assets to cover short-term obligations
- Structural decline in revenue combined with inability to cut costs proportionally
Key Metrics to Watch
- Operating cash flow trajectory and path to positive OCF
- Debt refinancing/restructuring announcements and covenant compliance
- Cash burn rate and months of runway remaining
- Quarterly revenue trends and gross margin recovery
- Debt/equity ratio and any covenant waivers or defaults
Financial Metrics
Revenue
3.9B
Net Income
-249.0M
EPS (Diluted)
$-0.86
Free Cash Flow
-893.0M
Total Assets
18.5B
Cash
723.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-4.6%
Net Margin
-6.4%
ROE
-8.3%
ROA
-1.3%
FCF Margin
-23.0%
Balance Sheet & Liquidity
Current Ratio
1.04x
Quick Ratio
0.51x
Debt/Equity
2.08x
Debt/Assets
82.8%
Interest Coverage
-1.57x
Long-term Debt
6.2B
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: 2026-05-08T10:29:04.070875 |
Data as of: 2026-03-31 |
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