Investment Thesis
Intergroup Corp exhibits severe financial distress with negative stockholders' equity of -$85.2M, indicating the company is technically insolvent. Despite modest revenue growth of 10.7% YoY, the company is destroying cash with negative operating cash flow of -$319K and negative free cash flow of -$1.8M, while carrying excessive debt of $233.2M against only $6.6M in cash. The critically low interest coverage ratio of 0.7x suggests the company cannot service its debt obligations from operating earnings, presenting extreme solvency risk.
Strengths
- Revenue growth of 10.7% year-over-year demonstrates top-line expansion
- Net income increased 29.1% YoY to $980K, showing improving profitability trend
- Operating margin of 13.5% is reasonable for apartment building operations
Risks
- Negative stockholders' equity of -$85.2M indicates technical insolvency and equity wipeout risk
- Interest coverage of 0.7x is critically low and unsustainable; company cannot cover debt service from operations
- Negative operating cash flow of -$319K despite positive net income signals poor earnings quality and potential accounting adjustments
- Massive leverage with $233.2M debt versus $6.6M cash creates severe liquidity risk and refinancing vulnerability
- Negative free cash flow of -$1.8M indicates the business cannot fund operations or capital needs without external financing
Key Metrics to Watch
- Operating cash flow trend - critical to verify sustainability of positive net income
- Debt service coverage ratio and refinancing schedule - essential for solvency assessment
- Stockholders' equity recovery path - monitor if negative equity can be eliminated through earnings retention
Financial Metrics
Revenue
35.2M
Net Income
980.0K
EPS (Diluted)
$0.46
Free Cash Flow
-1.8M
Total Assets
101.1M
Cash
6.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
13.5%
Net Margin
2.8%
ROE
N/A
ROA
1.0%
FCF Margin
-5.0%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
N/A
Debt/Assets
213.3%
Interest Coverage
0.74x
Long-term Debt
233.2M
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: 2026-03-29T10:58:11.506652 |
Data as of: 2025-12-31 |
Powered by Claude AI