Investment Thesis
Liberty Broadband is in severe financial distress with a $2.7B net loss, negative profitability across all margins, and a critical liquidity crisis evidenced by a 0.10x current ratio that indicates inability to meet short-term obligations. While positive operating and free cash flow provide temporary relief, the company cannot service debt from operations (negative 0.7x interest coverage) and holds only $57M in cash against $3.1B in liabilities, creating an unsustainable financial position.
Strengths
- Positive operating cash flow of $169M provides near-term liquidity runway despite accounting losses
- Free cash flow of $50M (9.5% margin) demonstrates ability to generate cash despite net losses
- Moderate leverage with 0.31x debt-to-equity ratio limits financial stress compared to typical cable operators
- Modest revenue growth of 3.6% YoY shows residual market demand in declining cable television sector
Risks
- Critical working capital deficit: 0.10x current ratio indicates technical insolvency and inability to cover short-term liabilities
- Catastrophic profitability: -507.8% net margin and -$2.7B annual loss is operationally unsustainable
- Negative interest coverage (-0.7x) means company cannot service debt obligations from operating income
- Severely depleted cash reserves of $57M are insufficient against $3.1B total liabilities and ongoing operations
- Negative operating margin (-6.8%) indicates core business operations are unprofitable before financing costs
Key Metrics to Watch
- Quarterly net income trend and path to profitability; operating margin recovery
- Current ratio and working capital position; ability to refinance maturing obligations
- Operating cash flow sustainability and free cash flow generation capacity
- Debt refinancing success and ability to extend maturity dates given negative covenants
Financial Metrics
Revenue
527.0M
Net Income
-2.7B
EPS (Diluted)
$4.55
Free Cash Flow
50.0M
Total Assets
8.8B
Cash
57.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-6.8%
Net Margin
-507.8%
ROE
-47.0%
ROA
-30.3%
FCF Margin
9.5%
Balance Sheet & Liquidity
Current Ratio
0.10x
Quick Ratio
0.10x
Debt/Equity
0.31x
Debt/Assets
35.5%
Interest Coverage
-0.71x
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: 2026-04-12T10:12:24.128797 |
Data as of: 2025-12-31 |
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