Investment Thesis
OneWater Marine exhibits severe financial distress with negative profitability (-2.5% net margin), negative operating cash flow (-23.8M), and interest coverage of only 0.2x, indicating inability to service 330M in debt from operations. Revenue growth of 5.6% provides no relief as margins collapse and the company burns cash, while high leverage (1.22x debt/equity) and weak liquidity (0.29x quick ratio) create imminent solvency concerns.
Strengths
- Revenue growth of 5.6% YoY demonstrates market demand for products/services
- Positive gross profit of 64.1M indicates some operating traction before fixed costs
- Cash balance of 68.4M provides short-term liquidity runway
Risks
- Net loss of 20.6M with -2.5% net margin indicates structural unprofitability despite growing sales
- Negative operating cash flow of -23.8M and free cash flow of -28.0M show cash burn despite revenue growth
- Interest coverage ratio of 0.2x means operating income cannot cover debt service obligations on 330M long-term debt
- Debt-to-equity ratio of 1.22x combined with negative profitability creates high financial distress risk
- Quick ratio of 0.29x indicates severe liquidity constraints and inability to meet short-term obligations
- Gross margin of only 7.8% leaves minimal buffer for cost fluctuations or operational errors
Key Metrics to Watch
- Operating cash flow - must achieve positive conversion to signal viability
- Interest coverage ratio - critical threshold is 1.0x; current 0.2x is unsustainable
- Net margin - requires expansion from -2.5% to profitability for long-term survival
- Debt reduction progress - leverage must decrease given negative earnings
- Quick ratio - monitor for further deterioration below 0.29x indicating liquidity crisis
Financial Metrics
Revenue
822.9M
Net Income
-20.6M
EPS (Diluted)
$2.77
Free Cash Flow
-28.0M
Total Assets
1.4B
Cash
68.4M
Profitability Ratios
Gross Margin
7.8%
Operating Margin
0.3%
Net Margin
-2.5%
ROE
-7.7%
ROA
-1.5%
FCF Margin
-3.4%
Balance Sheet & Liquidity
Current Ratio
1.16x
Quick Ratio
0.29x
Debt/Equity
1.22x
Debt/Assets
80.4%
Interest Coverage
0.15x
Long-term Debt
330.0M
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: 2026-05-06T18:29:14.549127 |
Data as of: 2026-03-31 |
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