Investment Thesis
NiSource exhibits growth-without-profitability dynamics with deteriorating financial fundamentals. Despite 23.5% revenue growth, net income is flat while the company generates negative free cash flow of -$362.9M, creating unsustainable capital constraints given 1.60x debt-to-equity leverage and 0.65x current ratio.
Strengths
- Strong revenue growth of 23.5% year-over-year demonstrating market demand
- Excellent operating margins of 35.3% showing operational efficiency at gross level
- Positive operating cash flow of $442.3M providing some liquidity buffer
Risks
- Negative free cash flow of -$362.9M indicates company is burning cash despite revenue growth; CapEx of $805.2M exceeds operating cash generation by 82%
- Critically low current ratio of 0.65x signals acute short-term liquidity stress and debt refinancing risk
- Severely depressed ROE of 5.3% and ROA of 1.4% reveal poor capital efficiency; net income flat despite 23.5% revenue growth indicates profitability is not scaling
- Elevated leverage with 1.60x debt-to-equity and $15.5B long-term debt combined with weak interest coverage of 3.3x leaves minimal margin for adverse conditions
Key Metrics to Watch
- Free cash flow trajectory and CapEx spending relative to operating cash generation
- Current ratio and cash position movements indicating refinancing risk
- Net margin trend to assess whether profitability will improve with higher revenues
- Interest coverage ratio as primary debt service capacity indicator
Financial Metrics
Revenue
2.3B
Net Income
507.1M
EPS (Diluted)
$1.06
Free Cash Flow
-362.9M
Total Assets
36.6B
Cash
71.9M
Profitability Ratios
Gross Margin
52.1%
Operating Margin
35.3%
Net Margin
21.8%
ROE
5.3%
ROA
1.4%
FCF Margin
-15.6%
Balance Sheet & Liquidity
Current Ratio
0.65x
Quick Ratio
0.65x
Debt/Equity
1.60x
Debt/Assets
0.0%
Interest Coverage
3.34x
Long-term Debt
15.5B
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: 2026-05-08T11:33:03.179860 |
Data as of: 2026-03-31 |
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