Investment Thesis
NEW ENGLAND REALTY is in financial distress with liabilities exceeding assets and critically weak interest coverage of 0.4x, indicating inability to service debt from operations. The negative equity position combined with net losses of $3.9M despite modest operating income signals unsustainable leverage and high refinancing risk in the overleveraged real estate sector.
Strengths
- Positive operating cash flow of $2.3M provides minimal debt service flexibility
- Operating income of $1.5M and 6.2% operating margin show underlying property operations are marginally profitable
- Real estate asset base of $497.3M in apartment buildings provides tangible collateral
Risks
- Liabilities of $576.9M exceed total assets of $497.3M, resulting in negative stockholders equity—technically insolvent on balance sheet basis
- Interest coverage ratio of 0.4x indicates operating income cannot cover debt service obligations; company dependent on refinancing or asset sales
- Net loss of $3.9M and negative 16.2% net margin show non-operating expenses (primarily interest) are destroying shareholder value; unsustainable capital structure
Key Metrics to Watch
- Interest coverage ratio trend—must improve above 1.5x to indicate financial stability
- Long-term debt reduction and refinancing terms—critical for solvency given $530.2M debt burden
- Operating cash flow sustainability—must consistently exceed $2.3M to service debt
Financial Metrics
Revenue
24.2M
Net Income
-3.9M
EPS (Diluted)
$0.00
Free Cash Flow
2.3M
Total Assets
497.3M
Cash
25.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
6.2%
Net Margin
-16.2%
ROE
N/A
ROA
-0.8%
FCF Margin
9.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
N/A
Debt/Assets
116.0%
Interest Coverage
0.38x
Long-term Debt
530.2M
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: 2026-05-10T07:36:10.611032 |
Data as of: 2026-03-31 |
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