Investment Thesis
While Prairie Operating Co. demonstrates strong operating cash flow ($153.9M, 63.6% FCF margin) and positive net income growth (+152.6%), the company faces critical balance sheet stress with severe liquidity constraints (0.63x current ratio, only $20K cash on hand) and high leverage (2.97x Debt/Equity). The unexplained 0.0% gross margin amid $241.6M revenue raises significant data quality concerns.
Strengths
- Robust operating cash flow of $153.9M with exceptional 63.6% free cash flow margin
- Strong net income growth (+152.6% YoY) and positive operating margin (27.1%)
- Solid return on equity (24.6%) indicates earnings power despite capital structure
Risks
- Critical liquidity crisis: current ratio of 0.63x with only $20,000 cash reserves; immediate solvency concerns
- Unexplained 0.0% gross margin on $241.6M revenue suggests data quality issues or significant hidden cost structure problems
- Excessive leverage at 2.97x Debt/Equity with $387M long-term debt and weak 2.3x interest coverage ratio
- Negative diluted EPS (-$1.35) despite positive net income indicates severe shareholder dilution from recent capital raises
- Extreme 2,943.8% revenue growth likely from acquisition rather than organic operations
Key Metrics to Watch
- Operating cash flow sustainability and working capital trends
- Gross margin clarification and detailed cost structure reconciliation
- Debt refinancing status and covenant compliance given low interest coverage
Financial Metrics
Revenue
241.6M
Net Income
32.1M
EPS (Diluted)
$-1.35
Free Cash Flow
153.7M
Total Assets
944.5M
Cash
20.0K
Profitability Ratios
Gross Margin
0.0%
Operating Margin
27.1%
Net Margin
13.3%
ROE
24.6%
ROA
3.4%
FCF Margin
63.6%
Balance Sheet & Liquidity
Current Ratio
0.63x
Quick Ratio
0.61x
Debt/Equity
2.97x
Debt/Assets
71.8%
Interest Coverage
2.30x
Long-term Debt
387.0M
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: 2026-04-14T15:24:26.606771 |
Data as of: 2025-12-31 |
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