Investment Thesis
Sky Harbour exhibits severe financial distress with a catastrophically low current ratio of 0.03x, indicating critical liquidity problems threatening near-term solvency. Despite 87% revenue growth, the company generated negative operating income of -28M and negative operating cash flow, revealing a fundamentally broken business model masked by non-operating gains. The inability to service debt from operations, combined with high leverage and negative free cash flow, creates acute restructuring or insolvency risk.
Strengths
- Strong revenue growth of 86.6% YoY demonstrates market demand
- Positive net income of $18.8M and 68.3% net margin (though earnings quality is poor)
- Substantial asset base of $593.2M in real estate provides recovery value
Risks
- Catastrophic liquidity crisis: current ratio of 0.03x indicates inability to meet short-term obligations
- Negative operating income of -28M despite revenue growth reveals broken core business economics
- Negative operating cash flow of -2.3M and free cash flow of -11.8M show cash burn despite growth
- Interest coverage ratio of -20.6x means company cannot service debt from operations
- Poor earnings quality: positive net income driven by non-operating items, not core operations
- High leverage with debt-to-equity of 1.09x and only $20.7M cash against $421.2M total liabilities
Key Metrics to Watch
- Current and quick ratios for liquidity stabilization
- Operating income and operating cash flow trending toward positive
- Interest coverage ratio improvement and debt service capacity
- Quarterly revenue sustainability and operating margin expansion
- Cash runway and refinancing/capital raise announcements
Financial Metrics
Revenue
27.5M
Net Income
18.8M
EPS (Diluted)
$0.09
Free Cash Flow
-11.8M
Total Assets
593.2M
Cash
20.7M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-101.8%
Net Margin
68.3%
ROE
10.9%
ROA
3.2%
FCF Margin
-43.0%
Balance Sheet & Liquidity
Current Ratio
0.03x
Quick Ratio
0.03x
Debt/Equity
1.09x
Debt/Assets
71.0%
Interest Coverage
-20.62x
Long-term Debt
187.4M
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: 2026-04-16T00:09:23.988611 |
Data as of: 2025-12-31 |
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