Investment Thesis
Despite impressive 80.8% YoY revenue growth, QNB Corp exhibits fundamental deterioration with flat net income growth and a critical interest coverage ratio of 0.9x, indicating operating income cannot cover interest expenses. The severe disconnect between revenue and profitability growth suggests operational challenges or margin compression that threaten financial stability.
Strengths
- Exceptional revenue growth of 80.8% year-over-year demonstrates market expansion
- Zero long-term debt and strong balance sheet provide financial flexibility
- Positive free cash flow of $16.6M with 17.9% FCF margin shows cash generation capability
Risks
- Interest coverage ratio of 0.9x - operating income insufficient to cover interest obligations, indicating structural stress
- Net income flat YoY despite 80.8% revenue growth reveals severe margin compression or cost control failure
- Low ROA of 0.7% demonstrates poor asset utilization efficiency relative to $1.9B asset base; typical bank concerns around credit quality
Key Metrics to Watch
- Interest coverage ratio - must exceed 1.5x to indicate financial health restoration
- Net profit margin sustainability - track whether revenue growth converts to bottom-line earnings
- Loan loss provisions and non-performing asset ratios - critical for bank credit risk assessment
Financial Metrics
Revenue
92.6M
Net Income
14.1M
EPS (Diluted)
$3.78
Free Cash Flow
16.6M
Total Assets
1.9B
Cash
50.3M
Profitability Ratios
Gross Margin
N/A
Operating Margin
19.4%
Net Margin
15.2%
ROE
10.9%
ROA
0.7%
FCF Margin
17.9%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.00x
Debt/Assets
93.2%
Interest Coverage
0.94x
Long-term Debt
0.0
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: 2026-04-14T20:57:26.413283 |
Data as of: 2025-12-31 |
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