Investment Thesis
Chart Industries is in severe financial distress with negative operating cash flow of -$248M and negative net income of -$17.1M despite $884.8M in revenue. Most critically, interest coverage of 0.2x indicates the company cannot service its $3.8B debt obligation from operating income, creating acute refinancing risk. Current cash burn rate of -$272.8M FCF is unsustainable and threatens solvency within 12-18 months without operational turnaround or debt restructuring.
Strengths
- Gross margin of 28.4% indicates underlying business economics are structurally sound
- Current ratio of 1.53x provides near-term liquidity buffer despite cash burn
- Net income improving from catastrophically negative baseline (201.5% YoY improvement, though still -$17.1M)
Risks
- Operating cash flow of -$248M indicates business is not generating cash despite positive revenue
- Interest coverage of 0.2x - company cannot pay interest on $3.8B debt from operations
- Free cash flow of -$272.8M is unsustainable; at this burn rate, $267.9M cash balance depletes in months
- Slow revenue growth of 2.5% YoY insufficient to outpace deterioration and restore profitability
- Debt-to-equity of 1.20x combined with negative cash generation increases default risk significantly
Key Metrics to Watch
- Operating cash flow - must turn positive to demonstrate operational viability
- Interest coverage ratio - must exceed 1.0x minimum to service debt sustainably
- Debt reduction and refinancing activity - indicates management action on solvency threat
- Revenue growth acceleration and path to positive operating cash flow
Financial Metrics
Revenue
884.8M
Net Income
-17.1M
EPS (Diluted)
$-0.36
Free Cash Flow
-272.8M
Total Assets
9.7B
Cash
267.9M
Profitability Ratios
Gross Margin
28.4%
Operating Margin
5.9%
Net Margin
-1.9%
ROE
-0.5%
ROA
-0.2%
FCF Margin
-30.8%
Balance Sheet & Liquidity
Current Ratio
1.53x
Quick Ratio
1.21x
Debt/Equity
1.20x
Debt/Assets
65.9%
Interest Coverage
0.18x
Long-term Debt
3.8B
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: 2026-05-12T08:00:15.151437 |
Data as of: 2026-03-31 |
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