Investment Thesis
Superior Group exhibits deteriorating fundamentals with net income declining 41.7% YoY while revenue remains essentially flat, resulting in razor-thin profitability margins (0.6% net margin, 0.7% operating margin) and abysmal capital returns (0.4% ROE, 0.2% ROA). Despite adequate liquidity and positive free cash flow, the company's tight interest coverage ratio (1.2x) and stagnant revenue growth in a competitive apparel sector suggest ongoing financial stress and limited shareholder value creation.
Strengths
- Strong liquidity position with 2.73x current ratio providing operational flexibility
- Positive free cash flow generation of $8.8M despite profitability challenges
- Moderate leverage with 0.42x debt-to-equity ratio maintaining financial flexibility
Risks
- Net income collapsed 41.7% YoY with profitability at critical levels (0.6% net margin)
- Interest coverage ratio of 1.2x indicates minimal cushion if operating performance deteriorates further
- Revenue growth essentially flat at 0.1% YoY in competitive apparel sector with no growth trajectory
Key Metrics to Watch
- Operating margin trend - monitor if further compression occurs below 0.7%
- Interest coverage ratio - watch for deterioration below 1.2x indicating debt refinancing risk
- Revenue growth acceleration - critical to achieve positive growth to justify operations
Financial Metrics
Revenue
140.9M
Net Income
834.0K
EPS (Diluted)
$0.06
Free Cash Flow
8.8M
Total Assets
406.5M
Cash
23.2M
Profitability Ratios
Gross Margin
37.1%
Operating Margin
0.7%
Net Margin
0.6%
ROE
0.4%
ROA
0.2%
FCF Margin
6.2%
Balance Sheet & Liquidity
Current Ratio
2.73x
Quick Ratio
1.76x
Debt/Equity
0.42x
Debt/Assets
52.6%
Interest Coverage
1.16x
Long-term Debt
80.3M
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: 2026-05-06T21:01:47.390100 |
Data as of: 2026-03-31 |
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