Investment Thesis
Empire State Realty faces deteriorating fundamentals with stagnant revenue growth (+0.2%), declining net income (-5.8%), and critically negative free cash flow (-$10.8M) despite positive operating cash flow. The dangerously low interest coverage ratio of 1.3x coupled with $2.4B in debt against only $132.7M in cash creates significant financial risk and limits operational flexibility.
Strengths
- Positive operating cash flow of $249.1M provides near-term liquidity buffer
- Respectable operating margin of 17.7% demonstrates core rental operations remain profitable
- Substantial asset base of $4.5B provides collateral foundation
Risks
- Critical interest coverage ratio of 1.3x leaves minimal room for cash flow deterioration or rate increases
- Negative free cash flow (-$10.8M) is unsustainable; capex exceeds operating cash generation
- High leverage with $2.4B debt and only $132.7M cash creates refinancing risk
- Revenue growth essentially flat (+0.2%) with declining net income and EPS
Key Metrics to Watch
- Free cash flow trend and debt paydown progress
- Interest coverage ratio improvement trajectory
- Operating cash flow stability amid commercial real estate headwinds
Financial Metrics
Revenue
768.3M
Net Income
68.8M
EPS (Diluted)
$0.25
Free Cash Flow
-10.8M
Total Assets
4.5B
Cash
132.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
17.7%
Net Margin
9.0%
ROE
N/A
ROA
1.5%
FCF Margin
-1.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
N/A
Debt/Assets
59.2%
Interest Coverage
1.32x
Long-term Debt
2.4B
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: 2026-04-13T13:45:21.589045 |
Data as of: 2025-12-31 |
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