Investment Thesis
Despite exceptional 53.7% revenue growth, Nicolet exhibits critical profitability deterioration with ROE of 0.7% and ROA of 0.1%, indicating severe underutilization of its $15.6B asset base. Most alarmingly, interest coverage of 0.5x signals the company cannot cover interest obligations from operating income—an unsustainable position for a commercial bank that demands immediate operational restructuring.
Strengths
- Strong top-line revenue growth of 53.7% YoY demonstrates market demand or successful expansion
- Positive free cash flow of $15.1M with 9.5% FCF margin provides liquidity cushion
- Conservative leverage with debt-to-equity of 0.08x and $615.5M cash position
Risks
- Critical interest coverage ratio of 0.5x indicates operating income cannot service debt obligations—unsustainable and implies refinancing or restructuring risk
- Catastrophically low ROE (0.7%) and ROA (0.1%) reveal severe capital inefficiency; net income of $15.2M on $15.6B assets is inadequate for stakeholder returns
- Disconnect between 53.7% revenue growth and 21.5% net income growth suggests margin compression, potential asset quality issues, or accounting adjustments requiring investigation
Key Metrics to Watch
- Interest coverage ratio trending above 1.5x (indicating debt service sustainability recovery)
- ROE improvement toward 8%+ (demonstrating capital efficiency recovery)
- Net margin expansion trajectory (to reconcile revenue growth with profitability gains)
Financial Metrics
Revenue
158.2M
Net Income
15.2M
EPS (Diluted)
$0.81
Free Cash Flow
15.1M
Total Assets
15.6B
Cash
615.5M
Profitability Ratios
Gross Margin
N/A
Operating Margin
12.0%
Net Margin
9.6%
ROE
0.7%
ROA
0.1%
FCF Margin
9.5%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.08x
Debt/Assets
85.5%
Interest Coverage
0.46x
Long-term Debt
180.0M
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: 2026-05-07T06:14:44.913827 |
Data as of: 2026-03-31 |
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