Investment Thesis
Middleby is unprofitable with a net loss of $50.1M despite positive operating cash flow, indicating structural challenges or significant below-the-line expenses. Revenue growth of 1.6% YoY is negligible, reflecting weak demand in the refrigeration machinery sector. While positive free cash flow and adequate liquidity provide a cushion, the company must demonstrate both profitability recovery and revenue acceleration to justify investment.
Strengths
- Positive free cash flow of $57.7M and operating cash flow of $65.6M despite net loss
- Solid operating margin of 15.9% and gross margin of 38.5% at operational level
- Adequate liquidity with 1.96x current ratio and moderate leverage at 0.77x debt-to-equity
Risks
- Net loss of $50.1M with negative net margin (-6.0%), ROE (-2.1%), and ROA (-0.9%)
- Stagnant revenue growth of 1.6% YoY indicates weak market demand and limited growth trajectory
- $183.5M gap between operating income and net income suggests material below-the-line expenses or charges
Key Metrics to Watch
- Net income recovery trajectory and return to profitability
- Revenue growth acceleration above current 1-2% range
- Operating cash flow sustainability and quality of earnings
Financial Metrics
Revenue
839.9M
Net Income
-50.1M
EPS (Diluted)
$-1.06
Free Cash Flow
57.7M
Total Assets
5.4B
Cash
177.1M
Profitability Ratios
Gross Margin
38.5%
Operating Margin
15.9%
Net Margin
-6.0%
ROE
-2.1%
ROA
-0.9%
FCF Margin
6.9%
Balance Sheet & Liquidity
Current Ratio
1.96x
Quick Ratio
1.10x
Debt/Equity
0.77x
Debt/Assets
0.0%
Interest Coverage
N/A
Long-term Debt
1.8B
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: 2026-05-15T07:11:16.156890 |
Data as of: 2026-04-04 |
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