Investment Thesis
MacKenzie Realty Capital exhibits severe financial distress with -79.8% net margins and negative operating cash flow, indicating the business cannot generate cash despite 40.2% revenue growth. The company carries dangerous leverage of 2.89x debt-to-equity with only $4.0M in cash reserves and negative interest coverage, creating imminent solvency risk.
Strengths
- Revenue growth of 40.2% year-over-year shows market demand
- Real estate asset base provides underlying collateral value
- Net loss improved relative to prior period (-14% worse YoY)
Risks
- Deeply unprofitable with -79.8% net margin and -73.4% operating margin
- Negative operating cash flow (-$2.8M) indicates business cannot fund operations organically
- Critically high leverage (2.89x D/E) with insufficient cash ($4.0M) creates immediate solvency risk
- Negative interest coverage (-2.4x) means operating income cannot service debt obligations
- Free cash flow negative at -18.9% of revenue signals deteriorating financial position
Key Metrics to Watch
- Path to operating profitability and positive operating cash flow
- Debt-to-equity ratio and debt refinancing capability
- Cash reserve levels and liquidity runway
- Property-level cash generation and occupancy metrics
- Going concern status and management restructuring plans
Financial Metrics
Revenue
14.6M
Net Income
-11.6M
EPS (Diluted)
$-6.16
Free Cash Flow
-2.8M
Total Assets
239.4M
Cash
4.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-73.4%
Net Margin
-79.8%
ROE
-22.9%
ROA
-4.9%
FCF Margin
-18.9%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
2.89x
Debt/Assets
64.4%
Interest Coverage
-2.44x
Long-term Debt
146.7M
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: 2026-05-23T08:45:38.642252 |
Data as of: 2026-03-31 |
Powered by Claude AI