Investment Thesis
Matson operates a capital-intensive water transportation business facing revenue headwinds (-2.3% YoY) with flat net income and extremely weak capital returns (ROE 2.1%, ROA 1.2%). While the company maintains adequate debt service capability and positive free cash flow, structural profitability challenges and emerging liquidity pressures (current ratio 0.82x) suggest limited upside without operational improvement.
Strengths
- Strong interest coverage ratio of 10.1x provides substantial debt service cushion
- Conservative capital structure with low debt-to-equity of 0.13x and ability to deleverage
- Positive free cash flow of $45.7M despite revenue decline demonstrates operational cash generation
Risks
- Revenue declining 2.3% YoY with flat net income indicates loss of pricing power or volume in cyclical industry downturn
- Critically low returns on capital (ROE 2.1%, ROA 1.2%) suggest inefficient deployment of $4.6B asset base
- Current ratio of 0.82x below 1.0 indicates near-term liquidity pressure despite $100M cash position
- Capital-intensive business model (CapEx $48.3M) limits free cash flow conversion relative to asset base
Key Metrics to Watch
- Revenue trajectory and pricing trends in container and bulk shipping markets
- Return on equity and asset efficiency improvements as key capital allocation measure
- Current and quick ratio recovery above 1.0x to address liquidity concerns
Financial Metrics
Revenue
757.8M
Net Income
56.6M
EPS (Diluted)
$1.85
Free Cash Flow
45.7M
Total Assets
4.6B
Cash
100.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
8.1%
Net Margin
7.5%
ROE
2.1%
ROA
1.2%
FCF Margin
6.0%
Balance Sheet & Liquidity
Current Ratio
0.82x
Quick Ratio
0.82x
Debt/Equity
0.13x
Debt/Assets
0.0%
Interest Coverage
10.07x
Long-term Debt
351.1M
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: 2026-05-06T20:38:20.943194 |
Data as of: 2026-03-31 |
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