Investment Thesis
MacKenzie Realty Capital is experiencing severe financial distress with negative net margins exceeding -105%, negative free cash flow of -3.6M, and operating losses of -8.2M despite 40.2% revenue growth. The company's 2.81x debt-to-equity ratio combined with negative interest coverage of -1.9x and minimal cash reserves of 4.3M indicate critical liquidity risk and inability to service its 145.6M in long-term debt.
Strengths
- 40.2% year-over-year revenue growth demonstrates top-line expansion
- Total assets of 238.1M provide some asset base for a REIT
- Single insider Form 4 filing suggests limited recent insider selling pressure
Risks
- Negative net income of -9.6M with net margin of -105% indicates fundamental business model deterioration
- Negative free cash flow of -3.6M with only 4.3M cash reserves creates imminent liquidity crisis risk
- Debt-to-equity ratio of 2.81x with negative interest coverage (-1.9x) indicates inability to service 145.6M long-term debt
- Operating margin of -89.8% demonstrates operational losses despite revenue growth, suggesting quality of earnings issues
- Negative ROE of -18.5% and ROA of -4.0% indicate shareholder value destruction
Key Metrics to Watch
- Operating cash flow trajectory and return to positive territory
- Cash position and liquidity runway given current burn rate
- Debt restructuring activities or refinancing needs for 145.6M long-term debt
- Operating margin improvement and path to profitability
- Interest coverage ratio recovery above 1.0x
Financial Metrics
Revenue
9.1M
Net Income
-9.6M
EPS (Diluted)
$-5.34
Free Cash Flow
-3.6M
Total Assets
238.1M
Cash
4.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-89.8%
Net Margin
-105.0%
ROE
-18.5%
ROA
-4.0%
FCF Margin
-39.3%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
2.81x
Debt/Assets
63.9%
Interest Coverage
-1.87x
Long-term Debt
145.6M
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: 2026-04-02T00:44:11.574503 |
Data as of: 2025-12-31 |
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