Investment Thesis
Laredo Oil is technically insolvent with negative stockholders' equity of -$13.3M and faces a critical liquidity crisis (0.05x current ratio). The company burns $1.5M annually in operating cash flow while generating nominal revenue of $3.1K (down 74% YoY), with only $535K cash remaining and $15M in liabilities against $1.7M in assets.
Strengths
- Retains modest cash position of $535K providing near-term operational runway
- Operates in commodity-linked sector with potential recovery if oil prices appreciate significantly
- May possess tangible asset value in oil and gas properties available for liquidation
Risks
- Negative stockholders' equity of -$13.3M indicates technical insolvency and acute bankruptcy risk
- Critical liquidity crisis with 0.05x current ratio - unable to meet near-term obligations
- Negative operating cash flow of -$1.5M is unsustainable against minimal $3.1K revenue base
- Total liabilities of $15.0M exceed total assets of $1.7M by approximately 8.8x
- Revenue collapsed 74.2% year-over-year with no evidence of stabilization
- Absence of insider buying activity despite distressed fundamentals signals lack of management confidence
Key Metrics to Watch
- Stockholders' equity trend and progress toward positive territory
- Operating cash flow achievement of positive generation or break-even
- Current ratio improvement and ability to service current liabilities
- Revenue stabilization and recovery trajectory
- Debt restructuring announcements or bankruptcy/insolvency filings
Financial Metrics
Revenue
3.1K
Net Income
-4.3M
EPS (Diluted)
$0.00
Free Cash Flow
-1.5M
Total Assets
1.7M
Cash
535.0K
Profitability Ratios
Gross Margin
100.0%
Operating Margin
-115,965.9%
Net Margin
-135,727.1%
ROE
N/A
ROA
-250.1%
FCF Margin
-48,180.5%
Balance Sheet & Liquidity
Current Ratio
0.05x
Quick Ratio
0.05x
Debt/Equity
N/A
Debt/Assets
878.1%
Interest Coverage
-6.23x
Long-term Debt
606.2K
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: 2026-04-12T19:51:30.238373 |
Data as of: 2025-11-30 |
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