Investment Thesis
Ingram Micro demonstrates revenue growth (9.5% YoY) and improving net income (24.1% YoY), but faces critical financial health deterioration with negative operating cash flow of -$978M and negative free cash flow of -$1B. Operating on razor-thin margins (0.7% net, 6.6% gross) with severely depressed returns on equity (2.4%) and assets (0.5%), the company shows poor cash conversion and limited sustainability at current burn rates.
Strengths
- Revenue growth of 9.5% YoY demonstrates continued market demand and volume expansion
- Net income growing 24.1% YoY faster than revenue, indicating operational leverage improvements
- Cash position of $916M provides near-term liquidity buffer
- Moderate leverage at 0.79x Debt/Equity ratio suggests manageable debt burden
Risks
- Negative operating cash flow of -$978M indicates severe fundamental cash generation failure
- Negative free cash flow of -$1B is unsustainable and threatens long-term viability
- Quick ratio of 0.93x below 1.0 signals potential liquidity stress combined with cash burn
- Net margin of 0.7% and gross margin of 6.6% leave zero room for operational error or margin compression
- Poor capital efficiency with ROE of 2.4% and ROA of 0.5% destroys shareholder value
- Working capital management appears severely challenged, likely driving cash flow deterioration
Key Metrics to Watch
- Operating cash flow trend - must return to positive to validate business model
- Cash position depletion rate - at -$1B FCF annually, runway is critically limited
- Days sales outstanding and inventory turnover - identify working capital improvement opportunities
- Gross and net margin trajectories - compression would be catastrophic given already thin margins
- Current ratio and quick ratio trends - confirm liquidity sustainability under negative cash generation
Financial Metrics
Revenue
14.0B
Net Income
98.9M
EPS (Diluted)
$0.42
Free Cash Flow
-1.0B
Total Assets
20.9B
Cash
916.0M
Profitability Ratios
Gross Margin
6.6%
Operating Margin
1.6%
Net Margin
0.7%
ROE
2.4%
ROA
0.5%
FCF Margin
-7.3%
Balance Sheet & Liquidity
Current Ratio
1.31x
Quick Ratio
0.93x
Debt/Equity
0.79x
Debt/Assets
79.9%
Interest Coverage
N/A
Long-term Debt
3.3B
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: 2026-05-06T17:57:09.336072 |
Data as of: 2026-03-28 |
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