Investment Thesis
Live Ventures faces critical financial distress with an interest coverage ratio of 0.2x, indicating inability to service $88.8M debt from operations. The company is unprofitable (net margin -1.2%) with declining revenue (-5.9% YoY) and razor-thin operating margins (0.7%), leaving no margin for error despite positive free cash flow.
Strengths
- Positive operating cash flow of $7.1M and free cash flow of $3.8M despite net losses
- Acceptable gross margin of 33.1% indicates reasonable cost control at product level
- Current ratio of 1.71x provides short-term liquidity buffer
Risks
- Critical interest coverage of 0.2x - company cannot cover debt service from operating income, indicating imminent refinancing risk
- Unprofitable operations with negative net income (-$2.5M), negative ROE (-2.7%) and negative ROA (-0.6%)
- Revenue declining 5.9% YoY combined with extremely thin operating margin (0.7%) creates unsustainable business model
- Leverage unsustainable relative to earnings power - $88.8M debt with operating income of only $1.4M
- Quick ratio of 0.55x suggests inventory-heavy balance sheet with liquidity concentration risk
Key Metrics to Watch
- Interest coverage ratio - currently critical at 0.2x, must improve to avoid default
- Revenue trend and stabilization - negative 5.9% YoY decline must reverse
- Operating margin expansion - 0.7% is unsustainably thin and leaves no room for disruption
- Debt refinancing ability and covenant compliance
- Free cash flow sustainability and debt paydown progress
Financial Metrics
Revenue
211.4M
Net Income
-2.5M
EPS (Diluted)
$-0.82
Free Cash Flow
3.8M
Total Assets
392.5M
Cash
15.2M
Profitability Ratios
Gross Margin
33.1%
Operating Margin
0.7%
Net Margin
-1.2%
ROE
-2.7%
ROA
-0.6%
FCF Margin
1.8%
Balance Sheet & Liquidity
Current Ratio
1.71x
Quick Ratio
0.55x
Debt/Equity
0.96x
Debt/Assets
76.3%
Interest Coverage
0.17x
Long-term Debt
88.8M
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: 2026-05-16T09:35:09.357479 |
Data as of: 2026-03-31 |
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