Investment Thesis
Latch is burning cash at an unsustainable rate with -$35.9M operating cash flow against just $34.6M in cash reserves, implying less than one year of runway. Despite 23.8% revenue growth, the company loses $0.76 on every revenue dollar with no improvement in losses YoY, indicating fundamental business model dysfunction rather than a typical growth-stage company trajectory.
Strengths
- Revenue growth of 23.8% YoY demonstrates market demand
- Strong balance sheet liquidity with 2.30x current ratio and $34.6M cash
- Minimal debt burden at $4.6M with 0.08x debt-to-equity ratio
Risks
- Catastrophic cash burn: -$35.9M operating cash flow exhausts $34.6M cash in <1 year at current rate
- Margins severely negative across the board: -75.2% operating margin and -76.7% net margin indicate core business unprofitability
- No profitability inflection visible: net losses flat YoY despite 23.8% revenue growth, suggesting revenue growth is not translating to financial improvement
Key Metrics to Watch
- Operating cash flow trend (critical - current -$35.9M is unsustainable)
- Gross margin expansion (currently N/A but essential to track if disclosed)
- Cash runway runway duration based on burn rate
Financial Metrics
Revenue
70.1M
Net Income
-53.7M
EPS (Diluted)
$-0.34
Free Cash Flow
-36.0M
Total Assets
106.8M
Cash
34.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-75.2%
Net Margin
-76.7%
ROE
-92.6%
ROA
-50.3%
FCF Margin
-51.3%
Balance Sheet & Liquidity
Current Ratio
2.30x
Quick Ratio
1.76x
Debt/Equity
0.08x
Debt/Assets
45.7%
Interest Coverage
N/A
Long-term Debt
4.6M
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: 2026-04-12T20:57:22.469693 |
Data as of: 2025-12-31 |
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