Investment Thesis
NewtekOne exhibits severe financial distress marked by a catastrophic 73.4% revenue decline, massive negative operating cash flow of -$579.2M, and interest coverage ratio of 0.5x indicating inability to service debt from operations. Despite reported net income growth, the company faces an acute liquidity crisis with only $4.2M cash against $819.9M long-term debt, suggesting imminent solvency stress.
Strengths
- ROE of 15.2% demonstrates some retained profitability on shareholder capital
- Net income reported at $60.5M (up 4% YoY) indicates partial earnings generation
- Insider activity with 5 Form 4 filings suggests some management engagement
Risks
- Revenue collapsed 73.4% YoY indicating fundamental business deterioration
- Operating cash flow of -$579.2M with interest coverage at 0.5x shows inability to cover debt obligations from operations
- Critical liquidity shortage: $4.2M cash against $819.9M debt with 2.06x leverage ratio
- Negative free cash flow of -$579.3M signals unsustainable cash burn and potential refinancing failure
- Net margin of 101% and net income growth amid revenue collapse suggests non-recurring gains masking operational distress
Key Metrics to Watch
- Operating cash flow trend and path to positive generation
- Interest coverage ratio recovery above 1.0x
- Cash position sustainability and debt refinancing capacity
- Revenue stabilization and return to growth
Financial Metrics
Revenue
59.9M
Net Income
60.5M
EPS (Diluted)
$2.18
Free Cash Flow
-579.3M
Total Assets
2.7B
Cash
4.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
15.1%
Net Margin
101.0%
ROE
15.2%
ROA
2.2%
FCF Margin
-967.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
2.06x
Debt/Assets
85.5%
Interest Coverage
0.50x
Long-term Debt
819.9M
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: 2026-04-13T04:36:23.033661 |
Data as of: 2025-12-31 |
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