Investment Thesis
Sportsman's Warehouse operates at significant losses (-$18.1M operating income, -7.1% margin) with rapidly deteriorating profitability (net income down 51.4% YoY). The company is burning cash unsustainably at -$59.6M free cash flow while maintaining dangerously low liquidity of $2.1M against $670.8M liabilities, creating an acute solvency risk.
Strengths
- Gross margin of 29.6% demonstrates core retail business can generate reasonable product margins
- Moderate leverage with 0.27x debt-to-equity ratio provides some financial flexibility relative to equity base
- Maintains operational scale with $256.1M in revenue
Risks
- Core business is operationally unprofitable with -$18.1M operating loss and -7.1% operating margin, with deteriorating trend (net income down 51.4% YoY)
- Severe liquidity crisis: -$59.6M free cash flow burn rate with only $2.1M cash on hand and thin 1.18x current ratio creates imminent solvency risk
- Cannot service debt from operations with -6.9x interest coverage ratio, compounded by anemic +1.0% revenue growth offering no path to operational leverage
Key Metrics to Watch
- Operating cash flow - must turn positive to avoid cash insolvency
- Cash balance trajectory and burn runway - critical near-term survival metric
- Operating margin improvement - need clear evidence of path to profitability
Financial Metrics
Revenue
256.1M
Net Income
-21.8M
EPS (Diluted)
$-0.56
Free Cash Flow
-59.6M
Total Assets
838.0M
Cash
2.1M
Profitability Ratios
Gross Margin
29.6%
Operating Margin
-7.1%
Net Margin
-8.5%
ROE
-13.1%
ROA
-2.6%
FCF Margin
-23.3%
Balance Sheet & Liquidity
Current Ratio
1.18x
Quick Ratio
1.18x
Debt/Equity
0.27x
Debt/Assets
80.0%
Interest Coverage
-6.90x
Long-term Debt
44.3M
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: 2026-06-04T07:45:28.189085 |
Data as of: 2026-05-02 |
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