Investment Thesis
MICROALLIANCE demonstrates exceptional profitability metrics with 39.9% net margins and 53.5% operating margins, alongside fortress-like balance sheet strength (29.67x current ratio, 0.01x debt/equity). However, the extreme 3030.7% YoY revenue growth, stagnant net income despite massive revenue expansion, and data freshness of September 2022 raise serious red flags about sustainability and data reliability.
Strengths
- Exceptional profitability margins (39.9% net, 53.5% operating) indicate strong pricing power and operational efficiency
- Fortress balance sheet with minimal debt (0.01x D/E), substantial cash reserves of $3.7M, and current ratio of 29.67x
- Positive free cash flow of $2.8M with 19.8% FCF margin shows ability to generate cash from operations
Risks
- Extraordinary 3030.7% YoY revenue growth is unsustainable and suggests potential accounting anomalies, one-time events, or data integrity issues
- Net income growth (0.0% YoY) completely disconnected from 3030.7% revenue growth indicates severe operational deterioration or non-recurring revenue
- Data freshness of September 2022 (3+ years old) makes current financial position unclear; no recent Form 4 insider activity suggests potential inactivity or delisting concerns on OTC market
- OTC listing and absence of recent insider activity raise governance and liquidity concerns typical of distressed or dormant companies
Key Metrics to Watch
- Most recent quarterly revenue and net income to verify if growth rates are sustainable or represent data anomalies
- Operating cash flow trends to confirm if positive FCF is repeatable or one-time
- Recent SEC filings (10-K, 10-Q) to assess current operational status and explain the extreme revenue/net income divergence
Financial Metrics
Revenue
14.4M
Net Income
5.7M
EPS (Diluted)
$0.01
Free Cash Flow
2.8M
Total Assets
31.9M
Cash
3.7M
Profitability Ratios
Gross Margin
65.7%
Operating Margin
53.5%
Net Margin
39.9%
ROE
18.8%
ROA
18.0%
FCF Margin
19.8%
Balance Sheet & Liquidity
Current Ratio
29.67x
Quick Ratio
12.67x
Debt/Equity
0.01x
Debt/Assets
4.3%
Interest Coverage
N/A
Long-term Debt
316.2K
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: 2026-04-01T12:42:11.730109 |
Data as of: 2022-09-30 |
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