Investment Thesis
Open Lending demonstrates exceptional 288% YoY revenue growth with a strong 76.3% gross margin, indicating a fundamentally sound business model. However, the company remains operationally unprofitable and is burning cash despite rapid growth, raising significant concerns about operational efficiency and long-term sustainability without a clear path to profitability.
Strengths
- Exceptional revenue growth of 288% YoY demonstrates strong market demand and product-market fit
- Very high gross margin of 76.3% indicates strong underlying unit economics and pricing power
- Substantial cash reserves of $173.3M (75% of total assets) provides significant runway to reach profitability
Risks
- Company is unprofitable with operating loss of $633K despite rapid revenue growth, indicating SG&A inefficiency
- Negative operating cash flow of $764K signals cash burn and questions about growth quality and sustainability
- Negative interest coverage ratio (-0.2x) demonstrates inability to cover debt service from operating earnings
Key Metrics to Watch
- Operating margin progression toward profitability as revenue scales
- Operating cash flow and free cash flow trends to confirm business model sustainability
- SG&A expense ratio relative to revenue to assess operational efficiency improvements
Financial Metrics
Revenue
20.5M
Net Income
-460.0K
EPS (Diluted)
$0.00
Free Cash Flow
-764.0K
Total Assets
231.1M
Cash
173.3M
Profitability Ratios
Gross Margin
76.3%
Operating Margin
-3.1%
Net Margin
-2.2%
ROE
-0.6%
ROA
-0.2%
FCF Margin
-3.7%
Balance Sheet & Liquidity
Current Ratio
4.44x
Quick Ratio
4.44x
Debt/Equity
1.10x
Debt/Assets
67.4%
Interest Coverage
-0.23x
Long-term Debt
82.9M
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: 2026-05-09T08:56:27.806727 |
Data as of: 2026-03-31 |
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