Investment Thesis
La Rosa Holdings exhibits fundamental insolvency with negative stockholders' equity of -$8.8M, massive operating losses (-$2.5M), and negative free cash flow of -$1.8M. The company is burning cash, cannot service debt from operations (interest coverage: -102.6x), and faces imminent solvency crisis with only $1.7M cash against $21.4M debt.
Strengths
- Current ratio of 1.34x provides minimal short-term liquidity buffer
- Gross profit of $2.0M (14.7% margin) demonstrates some underlying revenue can cover direct costs
- Diluted EPS improved 55% year-over-year, though from extremely depressed baseline
Risks
- Negative stockholders' equity (-$8.8M) indicates accounting insolvency; liabilities exceed assets
- Operating and free cash flow deeply negative (-$1.8M) signals unsustainable business model and burn rate
- Debt-to-assets ratio of 136% with minimal cash reserves creates acute solvency and refinancing risk
- Zero year-over-year revenue growth combined with -99.1% net margin indicates broken unit economics
- Interest coverage ratio of -102.6x means company cannot service debt from operations; highly vulnerable to default
- Real estate sector exposure and negative ROA (-64.6%) reflect operational distress
Key Metrics to Watch
- Stockholders' equity trend (must return to positive)
- Operating and free cash flow (must achieve cash flow breakeven)
- Debt refinancing success and credit terms
- Revenue growth rate and gross margin sustainability
- Cash balance and runway (critical solvency indicator)
Financial Metrics
Revenue
13.6M
Net Income
-13.5M
EPS (Diluted)
$-3,531.00
Free Cash Flow
-1.8M
Total Assets
20.8M
Cash
1.7M
Profitability Ratios
Gross Margin
14.7%
Operating Margin
-18.4%
Net Margin
-99.1%
ROE
N/A
ROA
-64.6%
FCF Margin
-13.0%
Balance Sheet & Liquidity
Current Ratio
1.34x
Quick Ratio
1.34x
Debt/Equity
N/A
Debt/Assets
136.0%
Interest Coverage
-102.59x
Long-term Debt
21.4M
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: 2026-08-01T06:00:39.306567 |
Data as of: 2026-03-31 |
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