Investment Thesis
JBG SMITH is fundamentally distressed with operating losses of -$23.0M, negative interest coverage of -0.8x indicating inability to service debt from operations, and collapsing profitability metrics across all dimensions. Revenue declining 8.9% YoY combined with 2.23x debt-to-equity leverage and minimal free cash flow generation (2.7% FCF margin on $127.6M revenue) creates acute refinancing risk and sustainability concerns.
Strengths
- Modest 1.3% YoY improvement in net loss trajectory
- Positive operating cash flow of $3.4M despite operating loss
- Stockholders equity of $1.1B provides some balance sheet cushion
Risks
- Negative interest coverage ratio (-0.8x) - operating income cannot cover interest expense, indicating imminent debt service stress
- High leverage (2.23x debt-to-equity) with $2.5B long-term debt unsupported by profitability or cash generation
- Revenue declining 8.9% YoY while maintaining substantial operating losses
- Critically low free cash flow generation relative to debt obligations and cash position ($79.8M vs $2.5B debt)
- Negative operating margin (-18.1%) across entire business
Key Metrics to Watch
- Interest coverage ratio - path to positive coverage from operations
- Revenue stabilization and occupancy trends in real estate portfolio
- Operating margin improvement and path to profitability
- Free cash flow generation adequacy relative to debt service requirements
- Debt refinancing activity and covenant compliance status
Financial Metrics
Revenue
127.6M
Net Income
-18.7M
EPS (Diluted)
$-0.32
Free Cash Flow
3.4M
Total Assets
4.3B
Cash
79.8M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-18.1%
Net Margin
-14.7%
ROE
-1.6%
ROA
-0.4%
FCF Margin
2.7%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
2.23x
Debt/Assets
62.3%
Interest Coverage
-0.76x
Long-term Debt
2.5B
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: 2026-05-07T09:25:58.855118 |
Data as of: 2026-03-31 |
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