Investment Thesis
Jefferson Capital demonstrates strong revenue growth (41.5% YoY) and robust free cash flow generation, but concerning margin compression with net income growing only 11% YoY signals deteriorating profitability. The combination of elevated leverage (3.28x Debt/Equity) and low interest coverage (2.8x) creates financial risk that outweighs growth momentum.
Strengths
- Strong revenue growth of 41.5% YoY indicating business expansion
- Excellent operating margin of 45.4% reflecting operational efficiency
- Robust free cash flow of $39.0M with 22.1% FCF margin demonstrating cash generation capability
Risks
- Significant profit margin compression with net income growth (11%) lagging revenue growth (41.5%)
- Tight interest coverage ratio of 2.8x leaving minimal cushion for earnings deterioration or interest rate shocks
- High leverage at 3.28x Debt/Equity with limited liquidity ($26.2M cash vs. $1.5B debt) creating refinancing vulnerability
Key Metrics to Watch
- Trend in net income margin vs. revenue growth divergence
- Interest coverage ratio and debt servicing capacity
- Loan loss provisions and credit quality deterioration
Financial Metrics
Revenue
176.4M
Net Income
37.6M
EPS (Diluted)
$0.61
Free Cash Flow
39.0M
Total Assets
2.1B
Cash
26.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
45.4%
Net Margin
21.3%
ROE
8.5%
ROA
1.8%
FCF Margin
22.1%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
3.28x
Debt/Assets
78.7%
Interest Coverage
2.77x
Long-term Debt
1.5B
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: 2026-05-16T09:29:34.999744 |
Data as of: 2026-03-31 |
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