Investment Thesis
Lazard exhibits concerning financial stress despite adequate profit margins, driven by massive negative operating cash flow (-$219.3M) and unsustainable leverage metrics. The combination of 1.92x debt/equity, 1.0x interest coverage, and declining earnings (-8% net income YoY) suggests the company is burning cash and has limited capacity to absorb economic headwinds.
Strengths
- Healthy net profit margin of 12.9% and operating margin of 11.5%
- Strong cash position of $1.0B provides near-term liquidity buffer
- Modest revenue growth of 2.8% YoY in cyclical investment advisory sector
Risks
- Negative operating cash flow of -$219.3M with negative FCF margin of -28.4% is unsustainable
- Critical interest coverage ratio of 1.0x leaves zero margin for error on debt servicing
- High leverage at 1.92x debt/equity coupled with declining profitability (EPS down 19% YoY) creates refinancing risk
- Earnings deterioration despite revenue growth signals operational efficiency problems
Key Metrics to Watch
- Operating cash flow trend and working capital dynamics
- Interest coverage ratio and debt refinancing needs
- Compensation expense as percentage of revenue
Financial Metrics
Revenue
779.4M
Net Income
100.9M
EPS (Diluted)
$0.91
Free Cash Flow
-221.5M
Total Assets
4.2B
Cash
1.0B
Profitability Ratios
Gross Margin
N/A
Operating Margin
11.5%
Net Margin
12.9%
ROE
11.5%
ROA
2.4%
FCF Margin
-28.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
1.92x
Debt/Assets
77.5%
Interest Coverage
1.02x
Long-term Debt
1.7B
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: 2026-05-06T12:08:38.465612 |
Data as of: 2026-03-31 |
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