Investment Thesis
NerdWallet demonstrates solid fundamentals with 21.7% revenue growth, exceptional balance sheet strength (0.21x debt/equity, 2.57x current ratio), and robust free cash flow generation (15.9% FCF margin). However, flat net income growth despite strong top-line expansion and low ROE/ROA (6.1%/4.7%) suggest margin compression and capital efficiency challenges that warrant monitoring.
Strengths
- Strong 21.7% YoY revenue growth indicates market demand and business momentum
- Excellent financial health with minimal leverage (0.21x debt/equity) and 136x interest coverage ratio
- Robust free cash flow generation of $35.3M (15.9% FCF margin) demonstrates cash-generative operations
- Exceptional liquidity with 2.57x current and quick ratios provides financial flexibility
- 68.4% EPS growth shows improving per-share profitability through efficient capital allocation
Risks
- Net income flat YoY despite 21.7% revenue growth indicates significant margin pressure or operational deleverage
- Low ROE (6.1%) and ROA (4.7%) suggest poor capital efficiency and returns on asset base
- Operating expense growth appears to be outpacing revenue growth, compressing profitability margins
- Missing gross margin data limits visibility into core business profitability and pricing power
- Sustained margin compression could deteriorate cash flow quality if operating leverage doesn't improve
Key Metrics to Watch
- Net profit margin trajectory - critical to confirm stabilization or recovery from flat growth
- Operating expense ratio vs revenue growth rate - need evidence of operating leverage improvement
- Return on Equity trend - must improve to justify equity capital employed
- Free cash flow sustainability and conversion rates - ensure cash generation remains robust
Financial Metrics
Revenue
222.2M
Net Income
20.4M
EPS (Diluted)
$0.29
Free Cash Flow
35.3M
Total Assets
432.0M
Cash
56.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
12.2%
Net Margin
9.2%
ROE
6.1%
ROA
4.7%
FCF Margin
15.9%
Balance Sheet & Liquidity
Current Ratio
2.57x
Quick Ratio
2.57x
Debt/Equity
0.21x
Debt/Assets
22.2%
Interest Coverage
136.00x
Long-term Debt
70.0M
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: 2026-05-08T11:35:31.272509 |
Data as of: 2026-03-31 |
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