Investment Thesis
Stabilis Solutions is deeply unprofitable with -39.3% net margin and declining revenue (-6.9% YoY), indicating fundamental operational challenges in a sector that should generate stable profits. While positive FCF of $7.1M provides temporary buffer, the company's current ratio of 0.93x signals liquidity stress and the inability to cover interest from operations (-40.7x coverage) suggests deteriorating financial health without near-term profitability recovery.
Strengths
- Positive free cash flow of $7.1M despite net losses, indicating cash generation capability
- Manageable debt-to-equity ratio of 0.13x with only $7.9M long-term debt
- Substantial asset base of $115.2M provides liquidation value protection
Risks
- Severe unprofitability with -39.2% operating margin and worsening net income (-129.4% YoY deterioration)
- Revenue contraction of 6.9% YoY in stable natural gas distribution sector suggests competitive/operational problems
- Liquidity crisis indicators: current ratio of 0.93x and quick ratio of 0.92x with only $3.1M cash
- Extremely thin gross margin of 5.7% indicates pricing power loss or cost structure misalignment
- Cannot service debt from operations with -40.7x interest coverage ratio
Key Metrics to Watch
- Operating cash flow sustainability (currently only bright spot masking negative net income)
- Revenue stabilization and path to positive operating income
- Gross margin expansion toward industry norms (should be 20%+)
- Cash position adequacy as operating losses continue
Financial Metrics
Revenue
10.4M
Net Income
-4.1M
EPS (Diluted)
$-0.06
Free Cash Flow
7.1M
Total Assets
115.2M
Cash
3.1M
Profitability Ratios
Gross Margin
5.7%
Operating Margin
-39.2%
Net Margin
-39.3%
ROE
-6.5%
ROA
-3.5%
FCF Margin
68.9%
Balance Sheet & Liquidity
Current Ratio
0.93x
Quick Ratio
0.92x
Debt/Equity
0.13x
Debt/Assets
45.3%
Interest Coverage
-40.70x
Long-term Debt
7.9M
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: 2026-05-08T12:23:40.545689 |
Data as of: 2026-03-31 |
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