Investment Thesis
N-able demonstrates solid operational metrics with 9.7% revenue growth, exceptional 76.2% gross margins, and positive 11.8% free cash flow margin, indicating a fundamentally sound software business model. However, net income turned negative at -$615K despite positive operating results, combined with $393.1M long-term debt and missing interest coverage data, signals financial stress that undermines the operational strength.
Strengths
- Exceptional 76.2% gross margin reflects strong product differentiation and pricing power typical of quality software
- Positive free cash flow of $15.8M with 11.8% FCF margin demonstrates capital efficiency despite net losses
- Moderate leverage at 0.49x debt-to-equity with solid 1.26x current ratio provides reasonable financial flexibility
- Consistent 9.7% YoY revenue growth shows market traction in prepackaged software sector
Risks
- Net income declined to -$615K despite positive operating cash flow, indicating significant below-the-line expense burden or debt service pressure that erodes shareholder value
- Missing interest coverage ratio combined with $393.1M long-term debt creates uncertainty about debt sustainability; negative ROE (-0.1%) confirms value destruction
- Diluted EPS collapsed 156.2% YoY to $0.00, signaling deteriorating profitability trend and shareholder dilution
- Substantial gap between operating profitability (9.3% margin) and net profitability (-0.5% margin) suggests potential hidden costs, high financing expenses, or tax liabilities
Key Metrics to Watch
- Net profit margin trend and reconciliation of operating income to net income
- Interest coverage ratio and debt service capacity
- Free cash flow sustainability and ability to reduce debt burden
- Gross margin maintenance amid competitive pressures
Financial Metrics
Revenue
133.7M
Net Income
-615.0K
EPS (Diluted)
$0.00
Free Cash Flow
15.8M
Total Assets
1.4B
Cash
117.8M
Profitability Ratios
Gross Margin
76.2%
Operating Margin
9.3%
Net Margin
-0.5%
ROE
-0.1%
ROA
0.0%
FCF Margin
11.8%
Balance Sheet & Liquidity
Current Ratio
1.26x
Quick Ratio
1.26x
Debt/Equity
0.49x
Debt/Assets
42.7%
Interest Coverage
N/A
Long-term Debt
393.1M
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: 2026-05-09T12:00:48.949898 |
Data as of: 2026-03-31 |
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