Investment Thesis
Owens Corning faces severe financial distress with a $105M net loss on $2.3B revenue, negative operating cash flow of -$154M, and free cash flow hemorrhaging of -$387M annually. The company's $5.1B debt load combined with weak interest coverage of 1.8x and deteriorating cash position creates an unsustainable structure requiring urgent operational restructuring or capital injection.
Strengths
- Revenue growth of 2.6% YoY demonstrates residual market demand
- Gross margin of 22.5% shows reasonable production efficiency despite profitability issues
- Asset base of $13.1B provides some equity cushion above liabilities
Risks
- Fundamental unprofitability with -$4.6% net margin indicates structural business challenges
- Negative operating cash flow of -$154M signals deteriorating operational performance and inability to self-fund
- Unsustainable free cash flow of -$387M annually would deplete $272M cash reserves in under 12 months at current burn rate
- High leverage (1.41x debt-to-equity) combined with weak 1.8x interest coverage creates acute refinancing risk
- Quick ratio of 0.74x indicates insufficient liquid assets to cover short-term obligations
Key Metrics to Watch
- Path to operating cash flow positivity and breakeven profitability
- Quarterly free cash flow trends and total cash balance depletion timeline
- Debt restructuring or refinancing activities and covenant compliance
- Operating margin expansion and cost structure reduction initiatives
- Working capital management and capital expenditure reduction plans
Financial Metrics
Revenue
2.3B
Net Income
-105.0M
EPS (Diluted)
$-1.29
Free Cash Flow
-387.0M
Total Assets
13.1B
Cash
272.0M
Profitability Ratios
Gross Margin
22.5%
Operating Margin
5.3%
Net Margin
-4.6%
ROE
-2.9%
ROA
-0.8%
FCF Margin
-17.1%
Balance Sheet & Liquidity
Current Ratio
1.24x
Quick Ratio
0.74x
Debt/Equity
1.41x
Debt/Assets
71.9%
Interest Coverage
1.82x
Long-term Debt
5.1B
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: 2026-05-08T11:43:44.972582 |
Data as of: 2026-03-31 |
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