Investment Thesis
Perrigo faces severe financial distress with operating losses of $372.3M, negative operating cash flow of $113.6M, and unsustainable free cash flow burn despite modest capex. The company cannot service $3.6B in debt from operations and lacks sufficient earnings power to stabilize, creating imminent refinancing and solvency risks absent dramatic operational restructuring.
Strengths
- Adequate gross margin of 33.6% indicates core products retain pricing power
- Strong short-term liquidity with 2.72x current ratio and 1.59x quick ratio
- Cash position of $357.2M provides near-term operational buffer
Risks
- Negative operating cash flow of -$113.6M indicates core business cannot fund operations
- Operating margin deeply negative at -38.4% with deteriorating profitability trajectory
- Unsustainable debt-to-equity of 1.45x combined with negative cash generation creates refinancing risk
- Interest coverage ratio N/A, indicating insufficient operating income to cover debt obligations
- Negative free cash flow of -$127.4M with declining revenue suggests structural operational challenges
Key Metrics to Watch
- Operating cash flow trend and path to positive generation
- Operating margin recovery and net income stabilization
- Revenue trajectory stabilization and underlying margin improvement
- Debt refinancing schedule and covenant compliance
- Cash burn rate and liquidity runway
Financial Metrics
Revenue
969.2M
Net Income
-398.6M
EPS (Diluted)
$-2.87
Free Cash Flow
-127.4M
Total Assets
8.0B
Cash
357.2M
Profitability Ratios
Gross Margin
33.6%
Operating Margin
-38.4%
Net Margin
-41.1%
ROE
-16.0%
ROA
-5.0%
FCF Margin
-13.1%
Balance Sheet & Liquidity
Current Ratio
2.72x
Quick Ratio
1.59x
Debt/Equity
1.45x
Debt/Assets
68.7%
Interest Coverage
N/A
Long-term Debt
3.6B
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: 2026-05-08T11:57:31.647855 |
Data as of: 2026-03-28 |
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