Investment Thesis
Everspin demonstrates operational distress with an unprofitable core business (operating margin -18.3%) and negative free cash flow of -$3.8M, despite modest 9.5% revenue growth. While a fortress balance sheet ($40.5M cash, 0.00x D/E) provides near-term runway, the company shows no clear path to profitability and is burning cash operationally—unsustainable without significant revenue acceleration or cost restructuring.
Strengths
- Fortress balance sheet with $40.5M cash and minimal debt ($16K long-term)
- Excellent liquidity metrics (5.76x current ratio, 4.74x quick ratio)
- Healthy gross margin of 52.7% indicates viable core product economics
- Positive revenue growth of 9.5% YoY demonstrates market demand
Risks
- Operating losses of -$2.7M with -18.3% operating margin showing systematic unprofitability
- Negative free cash flow of -$3.8M despite positive OCF indicates unsustainable cost structure
- High operating expense ratio (~70% of revenue) suggests bloated fixed cost base relative to small revenue scale
- Modest 9.5% growth insufficient to achieve profitability at current cost levels
- Negative ROE and ROA (-0.4%) demonstrate capital inefficiency
Key Metrics to Watch
- Operating expense absolute reductions and OpEx as % of revenue
- Revenue growth acceleration required to exceed 15-20% to support current cost base
- Free cash flow inflection point—when will company return to positive FCF
- Gross profit absolute growth versus operating expense trends
Financial Metrics
Revenue
14.9M
Net Income
-296.0K
EPS (Diluted)
$-0.01
Free Cash Flow
-3.8M
Total Assets
83.2M
Cash
40.5M
Profitability Ratios
Gross Margin
52.7%
Operating Margin
-18.3%
Net Margin
-2.0%
ROE
-0.4%
ROA
-0.4%
FCF Margin
-25.5%
Balance Sheet & Liquidity
Current Ratio
5.76x
Quick Ratio
4.74x
Debt/Equity
0.00x
Debt/Assets
15.6%
Interest Coverage
-43.11x
Long-term Debt
16.0K
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: 2026-05-06T15:49:37.537126 |
Data as of: 2026-03-31 |
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