Investment Thesis
JFB Construction is in severe financial distress despite 32% revenue growth, with profitability collapsing to -25.7% net margin and -$3.4M operating losses. The critically low 10.2% gross margin indicates structural cost/pricing problems, while only $3.7M cash reserves and negative operating performance create sustainability concerns. Without immediate margin improvement, the company faces potential liquidity crisis.
Strengths
- Positive operating cash flow of $1.7M and positive free cash flow of $1.6M despite net losses
- Strong liquidity position with 2.45x current and quick ratios
- No long-term debt (0.00x D/E ratio) provides financial flexibility and restructuring options
- Revenue growth of 32.3% YoY demonstrates market demand for services
Risks
- Severely unprofitable with -25.7% net margin and -$3.3M net loss, deteriorating 4530% YoY
- Critically low 10.2% gross margin indicates structural issues in pricing power or cost control
- Negative operating margin of -27% reveals operations are unsustainable and cash-consumptive
- Only $3.7M cash on hand creates limited runway for losses without external funding
- Deteriorating profitability trend despite revenue growth suggests quality-of-growth issues
Key Metrics to Watch
- Gross margin expansion - must improve from 10.2% to sustainable levels (15%+)
- Operating income - must return to profitability to validate business model
- Cash runway - critical to monitor quarterly cash burn given low reserves
- Contract margins and backlog quality - forward indicators of profitability recovery
Financial Metrics
Revenue
12.7M
Net Income
-3.3M
EPS (Diluted)
$-0.25
Free Cash Flow
1.6M
Total Assets
54.7M
Cash
3.7M
Profitability Ratios
Gross Margin
10.2%
Operating Margin
-27.0%
Net Margin
-25.7%
ROE
-7.0%
ROA
-6.0%
FCF Margin
12.9%
Balance Sheet & Liquidity
Current Ratio
2.45x
Quick Ratio
2.45x
Debt/Equity
0.00x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
N/A
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: 2026-05-15T09:34:39.519138 |
Data as of: 2026-03-31 |
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