Investment Thesis
Soluna is severely unprofitable with net losses of $53.4M on $29.7M revenue (-179.7% net margin), declining sales (-21.8% YoY), and negative operating cash flow of -$9.1M. While the company maintains $76.4M in cash providing near-term runway, the combination of operational losses far exceeding revenue, negative free cash flow of -$37.2M, and deteriorating fundamentals indicate the business model is not generating value.
Strengths
- Strong cash position of $76.4M provides 1-2 years of operational runway at current burn rates
- Healthy short-term liquidity with current ratio of 1.87x and quick ratio of 1.85x
- Moderate leverage with debt/equity of 0.33x limits near-term solvency risk
Risks
- Massive net losses of $53.4M represent 179.7% of revenue with no clear path to profitability
- Revenue declining 21.8% YoY indicates deteriorating business fundamentals and market demand
- Negative operating cash flow of -$9.1M combined with $28.1M capex creates unsustainable burn of -$37.2M free cash flow
- Extremely low gross margin of 6.1% provides no buffer for operational profitability
- Negative interest coverage of -10.4x means company cannot service debt from operations
Key Metrics to Watch
- Operating cash flow trend - critical indicator of whether business model can self-sustain
- Revenue growth rate - must return to positive growth to justify capital expenditures
- Cash balance depletion rate - determines runway before liquidity crisis
- Gross margin expansion - essential to achieve any meaningful profitability
Financial Metrics
Revenue
29.7M
Net Income
-53.4M
EPS (Diluted)
$-2.38
Free Cash Flow
-37.2M
Total Assets
187.9M
Cash
76.4M
Profitability Ratios
Gross Margin
6.1%
Operating Margin
-113.3%
Net Margin
-179.7%
ROE
-99.7%
ROA
-28.4%
FCF Margin
-125.2%
Balance Sheet & Liquidity
Current Ratio
1.87x
Quick Ratio
1.85x
Debt/Equity
0.33x
Debt/Assets
40.3%
Interest Coverage
-10.38x
Long-term Debt
17.9M
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: 2026-04-16T01:57:23.609835 |
Data as of: 2025-12-31 |
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