Investment Thesis
La Rosa Holdings is in severe financial distress with stalled revenue growth (0% YoY), catastrophic profitability metrics (-37.5% net margin, -19.9% operating margin), and unsustainable negative operating cash flow of -$6.2M annually. With only $4.0M in cash and minimal stockholders equity of $1.6M, the company faces imminent solvency concerns without fundamental operational restructuring.
Strengths
- Current ratio of 1.21x provides baseline short-term liquidity
- Moderate debt-to-equity ratio of 0.41x limits leverage risk relative to liabilities
- Some cash reserves ($4.0M) available for bridge operations
Risks
- Negative operating cash flow of -$6.2M annually will exhaust $4.0M cash reserves in less than one year at current burn rate
- Revenue completely stalled at 0% YoY growth with no disclosed initiatives to drive recovery
- Severely unprofitable with -37.5% net margin and -19.9% operating margin; losing money on core operations
- Extremely thin 8.4% gross margin leaves insufficient coverage for operating expenses and debt service
- Minimal stockholders equity of $1.6M creates high bankruptcy and dilution risk
- Negative interest coverage ratio (-497.9x) indicates inability to service debt from operations
Key Metrics to Watch
- Monthly cash burn rate and projected cash depletion timeline
- Quarterly revenue trend for any stabilization or recovery signs
- Gross margin improvement initiatives and pricing power
- Operating cash flow restoration path
- Customer acquisition, retention, and pipeline metrics
Financial Metrics
Revenue
60.9M
Net Income
-22.8M
EPS (Diluted)
$-32.64
Free Cash Flow
-6.2M
Total Assets
21.7M
Cash
4.0M
Profitability Ratios
Gross Margin
8.4%
Operating Margin
-19.9%
Net Margin
-37.5%
ROE
-1,465.8%
ROA
-105.3%
FCF Margin
-10.2%
Balance Sheet & Liquidity
Current Ratio
1.21x
Quick Ratio
1.21x
Debt/Equity
0.41x
Debt/Assets
73.7%
Interest Coverage
-497.90x
Long-term Debt
642.8K
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: 2026-04-12T19:57:23.190721 |
Data as of: 2025-09-30 |
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