Investment Thesis
Liberty Energy faces structural headwinds with declining revenues (-7.2% YoY) and deeply negative free cash flow (-$148.6M) despite reported net profitability, indicating cash burn and poor earnings quality. The company generates minimal returns on equity (1.2%) and assets (0.5%), suggesting operational inefficiency with uncertain recovery prospects.
Strengths
- Solid liquidity position with $699.1M cash and 2.21x current ratio provides near-term operational runway
- Manageable leverage at 0.66x debt-to-equity ratio with adequate interest coverage of 3.2x
- Positive operating income of $22.3M and positive net income of $22.6M indicate business remains operationally viable
Risks
- Negative free cash flow of -$148.6M is unsustainable; company burns cash despite profitability, raising earnings quality concerns
- Revenue declining 7.2% YoY with net margins at only 2.2% provides minimal buffer against further deterioration
- Poor returns on equity (1.2%) and assets (0.5%) reflect severe capital inefficiency and weak operational productivity
Key Metrics to Watch
- Free cash flow inflection point and path to positive generation
- Revenue stabilization and recovery trajectory in oil and gas services sector
- Operating cash flow improvement and working capital efficiency
Financial Metrics
Revenue
1.0B
Net Income
22.6M
EPS (Diluted)
$0.14
Free Cash Flow
-148.6M
Total Assets
4.4B
Cash
699.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
2.2%
Net Margin
2.2%
ROE
1.2%
ROA
0.5%
FCF Margin
-14.6%
Balance Sheet & Liquidity
Current Ratio
2.21x
Quick Ratio
1.97x
Debt/Equity
0.66x
Debt/Assets
56.2%
Interest Coverage
3.15x
Long-term Debt
1.3B
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: 2026-04-29T14:02:16.059437 |
Data as of: 2026-03-31 |
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