Investment Thesis
JLL exhibits concerning operational dynamics despite positive net income, with negative operating cash flow of -$755M indicating the company is burning cash despite $6.4B in revenue. Razor-thin profit margins (2.5% net, 3.2% operating) and extremely poor capital returns (ROE 2.2%, ROA 0.9%) reflect a structurally low-margin business model. Deteriorating liquidity (1.12x current ratio) combined with negative free cash flow of -$822.6M raises sustainability concerns.
Strengths
- Low financial leverage with debt-to-equity of 0.04x reduces bankruptcy risk
- Adequate interest coverage ratio of 7.3x demonstrates ability to service debt obligations
- Positive net income of $159M and $436.2M cash balance provides near-term cushion
Risks
- Negative operating cash flow of -$755M is unsustainable and indicates accounting profits are not converting to actual cash generation
- Negative free cash flow of -$822.6M with -12.9% FCF margin signals the company is consuming capital rather than generating it
- Extremely low profitability margins (2.5% net, 3.2% operating) and poor capital efficiency (2.2% ROE, 0.9% ROA) indicate weak fundamental business quality
- Tight liquidity position with 1.12x current ratio approaching concerning levels if cash burn continues
- Highly suspicious 24,438.9% YoY revenue growth suggests data anomaly or accounting methodology change requiring clarification
Key Metrics to Watch
- Operating cash flow trend - critical to confirm if negative cash flow reverses
- Free cash flow and FCF margin - must return to positive to validate business sustainability
- Current ratio and cash balance depletion rate - track liquidity runway
- Operating and net profit margins - monitor if company can improve structural profitability
Financial Metrics
Revenue
6.4B
Net Income
159.0M
EPS (Diluted)
$3.33
Free Cash Flow
-822.6M
Total Assets
17.9B
Cash
436.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
3.2%
Net Margin
2.5%
ROE
2.2%
ROA
0.9%
FCF Margin
-12.9%
Balance Sheet & Liquidity
Current Ratio
1.12x
Quick Ratio
1.12x
Debt/Equity
0.04x
Debt/Assets
58.5%
Interest Coverage
7.27x
Long-term Debt
272.8M
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: 2026-05-06T18:02:47.031187 |
Data as of: 2026-03-31 |
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