Investment Thesis
Oil-Dri demonstrates solid fundamentals with a fortress balance sheet (zero debt, $62.9M cash), exceptional liquidity (3.28x current ratio), and robust free cash flow generation ($32.3M). However, net income growth (+5% YoY) significantly trailing revenue growth (+11% YoY) indicates margin compression that requires monitoring.
Strengths
- Exceptional balance sheet with zero debt and substantial cash position ($62.9M)
- Outstanding liquidity metrics (Current Ratio 3.28x, Quick Ratio 2.40x) provide significant financial flexibility
- Strong free cash flow generation of $32.3M (8.9% FCF margin) with operating CF exceeding net income
- Solid profitability with 11.7% net margin and 13.6% operating margin despite industry pressures
- 11% revenue growth demonstrates market demand and business traction
Risks
- Net income growth (+5%) significantly lagging revenue growth (+11%) signals emerging margin compression
- Manufacturing sector exposure to commodity cost inflation and cyclical economic downturns
- Limited insider buying activity (only 2 Form 4 filings in 90 days) may indicate modest insider conviction
- Potential sustained operating expense pressures if input costs remain elevated
Key Metrics to Watch
- Gross margin and operating margin trajectory to assess pricing power versus cost inflation
- Free cash flow conversion and working capital management efficiency
- Revenue growth sustainability and customer demand trends in end markets
Financial Metrics
Revenue
364.6M
Net Income
42.6M
EPS (Diluted)
$1.69
Free Cash Flow
32.3M
Total Assets
408.8M
Cash
62.9M
Profitability Ratios
Gross Margin
27.8%
Operating Margin
13.6%
Net Margin
11.7%
ROE
14.9%
ROA
10.4%
FCF Margin
8.9%
Balance Sheet & Liquidity
Current Ratio
3.28x
Quick Ratio
2.40x
Debt/Equity
0.00x
Debt/Assets
30.2%
Interest Coverage
30.18x
Long-term Debt
N/A
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: 2026-06-09T07:31:16.966704 |
Data as of: 2026-04-30 |
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