Investment Thesis
Limoneira is in financial distress with deeply negative profitability (-73.2% net margin, -76.5% operating margin) and severe cash burn (-$19.9M FCF on only $42.1M revenue). The company maintains minimal cash reserves ($891K) while carrying $94.1M in long-term debt that cannot be serviced from operations, creating immediate solvency concerns. Without dramatic operational turnaround or significant capital infusion, the company faces potential insolvency.
Strengths
- Positive revenue growth of 3.9% YoY shows modest demand for products
- Current ratio of 1.68x indicates sufficient short-term liquidity coverage relative to current liabilities
- Positive stockholders equity of $152.9M provides balance sheet cushion
Risks
- Critical cash depletion: only $891K cash against $42.1M revenue run-rate (10 days coverage)
- Negative operating cash flow of -$16.2M indicates core business cannot fund operations
- Unable to service $94.1M debt: interest coverage ratio of -21.5x means no operating income to cover debt payments
- Massive operating losses consuming 76.5% of every revenue dollar
- 9 Form 4 insider filings in 90 days may signal distress or insider selling
Key Metrics to Watch
- Monthly cash burn rate and path to cash runway exhaustion
- Operating cash flow trend and return to positive territory
- Debt refinancing or covenant waiver negotiations with lenders
- Asset impairment charges or write-downs on balance sheet
- Revenue sustainability and gross margin recovery
Financial Metrics
Revenue
42.1M
Net Income
-30.8M
EPS (Diluted)
$-1.74
Free Cash Flow
-19.9M
Total Assets
293.8M
Cash
891.0K
Profitability Ratios
Gross Margin
N/A
Operating Margin
-76.5%
Net Margin
-73.2%
ROE
-20.2%
ROA
-10.5%
FCF Margin
-47.2%
Balance Sheet & Liquidity
Current Ratio
1.68x
Quick Ratio
1.68x
Debt/Equity
0.62x
Debt/Assets
44.3%
Interest Coverage
-21.48x
Long-term Debt
94.1M
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: 2026-06-10T07:40:27.306227 |
Data as of: 2026-04-30 |
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