Investment Thesis
Knight-Swift exhibits severe operational distress with negative profitability, catastrophic free cash flow of -$687.4M despite $142.5M in operating cash flow, and critical liquidity constraints (0.70x current ratio) threatening financial stability. The company's $222.8M cash position provides minimal runway against annual FCF burn, while interest coverage of 0.3x indicates dangerous debt service vulnerability in this capital-intensive sector.
Strengths
- Reasonable leverage with 0.25x debt-to-equity ratio
- Substantial asset base of $11.9B providing operational scale
- Positive operating cash flow of $142.5M from core operations
Risks
- Negative net income and declining profitability with -0.1% net margin despite revenue generation
- Unsustainable free cash flow of -$687.4M annually with only $222.8M cash, creating 4-month runway
- Critical liquidity crisis with 0.70x current ratio indicating inability to cover short-term obligations
- Catastrophically weak interest coverage of 0.3x creating acute debt service default risk
- Stagnant revenue growth of +0.8% YoY in capital-intensive trucking sector requiring fleet investment
- Capital expenditure of $830M far exceeds operating cash generation sustainability
Key Metrics to Watch
- Free cash flow reversal and capital expenditure rationalization
- Operating margin recovery toward 3-5% and path to profitability
- Current ratio improvement above 1.0x and liquidity position sustainability
- Interest coverage ratio improvement and debt refinancing capacity
- Revenue growth acceleration and pricing power in competitive trucking markets
Financial Metrics
Revenue
1.9B
Net Income
-1.3M
EPS (Diluted)
$-0.01
Free Cash Flow
-687.4M
Total Assets
11.9B
Cash
222.8M
Profitability Ratios
Gross Margin
N/A
Operating Margin
1.5%
Net Margin
-0.1%
ROE
0.0%
ROA
0.0%
FCF Margin
-37.2%
Balance Sheet & Liquidity
Current Ratio
0.70x
Quick Ratio
0.70x
Debt/Equity
0.25x
Debt/Assets
40.9%
Interest Coverage
0.35x
Long-term Debt
1.8B
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: 2026-05-06T11:22:01.117164 |
Data as of: 2026-03-31 |
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