Investment Thesis
Phibro demonstrates strong topline growth of 27.4% YoY and maintains solid operating margins of 13%, supported by excellent liquidity (3.17x current ratio) and manageable interest coverage (8.6x). However, net income growth stalled at 0% YoY despite revenue expansion, and critically low free cash flow generation of $4.6M (0.4% margin) creates a concerning disconnect between reported profitability and actual cash conversion, leaving limited financial flexibility against a 1.71x debt-to-equity ratio.
Strengths
- Strong revenue growth of 27.4% YoY in a pharmaceutical sector
- Solid operating margins at 13.0% with reasonable gross margins of 33.7%
- Excellent liquidity position with 3.17x current ratio and 8.6x interest coverage ratio
Risks
- Net income completely flat YoY despite 27% revenue growth indicates severe margin compression or operational headwinds
- Critically weak free cash flow of $4.6M (0.4% of revenue) signals poor cash conversion despite reported profitability
- High leverage (1.71x debt-to-equity) with only $54.9M cash against $620.5M long-term debt limits financial flexibility
Key Metrics to Watch
- Free cash flow generation and FCF conversion rates in subsequent quarters
- Net margin trends and ability to expand net income in line with revenue growth
- Debt reduction progress and management of leverage ratios
Financial Metrics
Revenue
1.1B
Net Income
78.0M
EPS (Diluted)
$1.90
Free Cash Flow
4.6M
Total Assets
1.4B
Cash
54.9M
Profitability Ratios
Gross Margin
33.7%
Operating Margin
13.0%
Net Margin
7.0%
ROE
21.6%
ROA
5.4%
FCF Margin
0.4%
Balance Sheet & Liquidity
Current Ratio
3.17x
Quick Ratio
1.26x
Debt/Equity
1.71x
Debt/Assets
75.0%
Interest Coverage
8.60x
Long-term Debt
620.5M
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: 2026-05-08T11:51:00.085978 |
Data as of: 2026-03-31 |
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