Investment Thesis
Matrix Service is unprofitable with severely compressed margins (7.1% gross, -1.4% operating), indicating structural cost or pricing challenges in its construction contracting business. While the company maintains a strong cash position of $233M and minimal debt, persistent operational losses, negative returns on equity/assets, and a current ratio below 1.0 raise material concerns about sustainable operations and financial deterioration.
Strengths
- Strong cash position of $233M with minimal long-term debt ($8.9M) providing financial cushion
- Positive operating cash flow ($15.7M) and free cash flow ($11.6M) despite net losses, indicating some operational viability
- Conservative debt structure with Debt/Equity ratio of 0.06x limiting leverage risk
Risks
- Sustained unprofitability at operating ($-8.7M) and net income ($-3.7M) levels with negative ROE (-2.7%) and ROA (-0.6%)
- Critically thin gross margin of 7.1% indicates structural pricing pressure or cost management issues endemic to operations
- Current ratio of 0.90x and quick ratio of 0.88x signal short-term liquidity stress despite large cash reserves
Key Metrics to Watch
- Gross margin trend and evidence of pricing/cost structure improvements
- Operating income path to breakeven and achievement of net profitability
- Working capital management and current ratio recovery above 1.0x
Financial Metrics
Revenue
629.1M
Net Income
-3.7M
EPS (Diluted)
$-0.13
Free Cash Flow
11.6M
Total Assets
616.6M
Cash
233.0M
Profitability Ratios
Gross Margin
7.1%
Operating Margin
-1.4%
Net Margin
-0.6%
ROE
-2.7%
ROA
-0.6%
FCF Margin
1.8%
Balance Sheet & Liquidity
Current Ratio
0.90x
Quick Ratio
0.88x
Debt/Equity
0.06x
Debt/Assets
77.4%
Interest Coverage
-26.45x
Long-term Debt
8.9M
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: 2026-05-08T11:26:34.987565 |
Data as of: 2026-03-31 |
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