Investment Thesis
Jack in the Box faces severe fundamental challenges with negative stockholders equity of -922.1M indicating technical insolvency, coupled with deteriorating profitability (-120% YoY net income decline and 1.3% net margin). While operating cash flow remains positive at 162.4M, this is insufficient to offset the structural balance sheet issues and liquidity constraints (0.65x current ratio) relative to 1.6B in debt.
Strengths
- Strong operating cash flow of 162.4M providing liquidity buffer
- Positive free cash flow of 127.8M with 21.2% FCF margin indicating operational efficiency
- Respectable operating margin of 13.6% despite revenue challenges
Risks
- Negative stockholders equity of -922.1M - company is technically insolvent from balance sheet perspective
- Net income declined 120% YoY with extremely thin 1.3% net margin indicating profitability deterioration
- Weak liquidity position with 0.65x current ratio and only 43.0M cash against 1.6B long-term debt
- Poor debt servicing capacity with minimal equity cushion to absorb operational downturns
Key Metrics to Watch
- Stockholders equity trend - critical to monitor recovery path toward positive equity
- Net income profitability - assess whether decline stabilizes and margins improve
- Debt reduction progress - evaluate deleveraging relative to cash flow generation
- Liquidity ratios - monitor whether current and quick ratios improve above 1.0x threshold
Financial Metrics
Revenue
603.8M
Net Income
7.8M
EPS (Diluted)
$0.40
Free Cash Flow
127.8M
Total Assets
2.0B
Cash
43.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
13.6%
Net Margin
1.3%
ROE
N/A
ROA
0.4%
FCF Margin
21.2%
Balance Sheet & Liquidity
Current Ratio
0.65x
Quick Ratio
0.64x
Debt/Equity
N/A
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
1.6B
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: 2026-05-15T09:33:49.908353 |
Data as of: 2026-04-12 |
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