Investment Thesis
RE/MAX is unprofitable with deteriorating fundamentals, reporting negative operating income (-$7.8M), negative operating cash flow (-$1.8M), and declining revenue (-5.2% YoY). Most critically, total liabilities ($614.0M) exceed total assets ($572.3M), creating insolvency risk, while negative interest coverage (-33.4x) indicates the company cannot service its $431.4M debt burden from operations, raising default risk.
Strengths
- Maintains $107.1M cash providing short-term liquidity runway
- Current ratio of 1.57x indicates adequate near-term ability to meet obligations
- Still generating $70.2M in quarterly revenue despite headwinds
Risks
- Liabilities exceed assets by $41.7M, creating technical insolvency and bankruptcy risk
- Negative operating cash flow of -$1.8M unsustainable long-term with $431.4M long-term debt
- Cannot cover interest expenses from operations (negative interest coverage ratio)
- Revenue declining 5.2% YoY while company remains deeply unprofitable
- Significant covenant violation risk given negative fundamentals and debt burden
Key Metrics to Watch
- Quarterly operating cash flow and burn rate
- Revenue stabilization and return to growth
- Operating margin path to profitability
- Debt covenant compliance status
- Net debt reduction or refinancing activity
Financial Metrics
Revenue
70.2M
Net Income
-9.7M
EPS (Diluted)
$0.60
Free Cash Flow
-4.3M
Total Assets
572.3M
Cash
107.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-11.1%
Net Margin
-13.9%
ROE
-2.2%
ROA
-1.7%
FCF Margin
-6.1%
Balance Sheet & Liquidity
Current Ratio
1.57x
Quick Ratio
1.57x
Debt/Equity
0.97x
Debt/Assets
107.3%
Interest Coverage
-33.44x
Long-term Debt
431.4M
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: 2026-05-09T12:53:41.734143 |
Data as of: 2026-03-31 |
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