Investment Thesis
Gran Tierra Energy faces critical financial distress with a net loss of -$119.2M, operating margin of -84.7%, and a liquidity crisis evidenced by a current ratio of 0.53x. The company carries excessive leverage (debt/equity of 5.07x) with insufficient equity cushion ($108.9M) to absorb losses, while inability to cover interest payments from operations signals imminent solvency risk.
Strengths
- Positive operating cash flow of $172.7M suggests underlying asset cash generation despite non-cash charges
- Cash balance of $124.8M provides temporary liquidity buffer for operations
- Crude oil & gas sector is cyclical and could benefit from commodity price recovery
Risks
- Critical liquidity crisis: current ratio of 0.53x indicates inability to meet short-term obligations with current assets
- Unsustainable debt load: 5.07x debt-to-equity ratio with negative interest coverage (-2.9x) creates default risk
- Deteriorating operations: -$119.2M net loss with -84.7% operating margin and declining revenue (-4.0% YoY) eroding equity base
- Thin capital structure: $108.9M equity against $1.6B assets leaves minimal margin for error or additional losses
Key Metrics to Watch
- Current ratio - must improve above 1.0x or refinancing/restructuring likely
- Operating loss trend - critical to achieve positive operating income to stabilize debt service
- Debt levels and refinancing capacity - watch for covenant violations or debt restructuring announcements
Financial Metrics
Revenue
172.1M
Net Income
-119.2M
EPS (Diluted)
$-3.38
Free Cash Flow
172.7M
Total Assets
1.6B
Cash
124.8M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-84.7%
Net Margin
-69.3%
ROE
-109.4%
ROA
-7.3%
FCF Margin
100.4%
Balance Sheet & Liquidity
Current Ratio
0.53x
Quick Ratio
0.45x
Debt/Equity
5.07x
Debt/Assets
0.0%
Interest Coverage
-2.92x
Long-term Debt
552.1M
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: 2026-05-09T10:58:52.244756 |
Data as of: 2026-03-31 |
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