Investment Thesis
Southland Holdings exhibits severe financial distress with negative stockholders' equity of -$140.9M and negative gross margins of -20.1%, indicating the core business loses money on operations. A 21.2% revenue decline coupled with -$306.5M net losses and $257.7M debt obligations create an unsustainable financial structure with minimal path to recovery.
Strengths
- Positive operating cash flow of $16.6M provides near-term liquidity buffer
- Current ratio of 1.12x maintains technical short-term solvency
- Cash position of $52.7M provides limited runway for restructuring efforts
Risks
- Negative stockholders' equity of -$140.9M indicates balance sheet insolvency
- Negative gross margin of -20.1% demonstrates core operations are unprofitable at product level
- 21.2% YoY revenue decline signals structural market challenges or operational collapse
- Long-term debt of $257.7M cannot be serviced with negative earnings and -38.4x interest coverage
- Thin FCF margin of 1.6% is unsustainable given operating losses; cash flow deterioration likely
Key Metrics to Watch
- Gross margin return to positive territory
- Revenue stabilization and growth resumption
- Path to stockholders' equity recovery
- Debt covenant compliance and refinancing capacity
- Operating cash flow sustainability given scale of losses
Financial Metrics
Revenue
772.2M
Net Income
-306.5M
EPS (Diluted)
$-5.67
Free Cash Flow
12.7M
Total Assets
989.3M
Cash
52.7M
Profitability Ratios
Gross Margin
-20.1%
Operating Margin
-28.1%
Net Margin
-39.7%
ROE
N/A
ROA
-31.0%
FCF Margin
1.6%
Balance Sheet & Liquidity
Current Ratio
1.12x
Quick Ratio
1.12x
Debt/Equity
N/A
Debt/Assets
113.4%
Interest Coverage
-38.35x
Long-term Debt
257.7M
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: 2026-04-16T01:48:22.536670 |
Data as of: 2025-12-31 |
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