Investment Thesis
Pathfinder Bancorp exhibits severely deteriorating fundamentals with net income collapsing 140% YoY despite 72.9% revenue growth, indicating profitability quality issues. Critical red flags include near-zero returns on capital (ROE 2%, ROA 0.2%), dangerously inadequate interest coverage (0.2x), and persistent negative operating cash flow, suggesting the company struggles to service debt and generate shareholder value.
Strengths
- Strong revenue growth of 72.9% YoY demonstrates market activity expansion
- Conservative leverage with Debt/Equity ratio of 0.10x provides financial flexibility
- Operating margin of 16.8% shows reasonable operational efficiency at the business unit level
Risks
- Catastrophic net income decline of 140% YoY indicates severe profitability deterioration and potential structural business problems
- Interest coverage ratio of 0.2x is critically low; company covers only 20% of interest obligations from operating income, suggesting solvency risk
- Negative operating cash flow (-241K) and negative free cash flow (-489K) indicate the business is destroying capital and unsustainable without external funding
Key Metrics to Watch
- Operating cash flow trend and return to positive territory
- Net income trajectory and root cause of YoY decline
- Interest coverage ratio improvement and debt service capability
Financial Metrics
Revenue
17.5M
Net Income
2.4M
EPS (Diluted)
$0.47
Free Cash Flow
-489.0K
Total Assets
1.4B
Cash
39.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
16.8%
Net Margin
13.8%
ROE
2.0%
ROA
0.2%
FCF Margin
-2.8%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.10x
Debt/Assets
91.3%
Interest Coverage
0.16x
Long-term Debt
12.4M
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: 2026-05-16T06:30:17.437074 |
Data as of: 2026-03-31 |
Powered by Claude AI