Investment Thesis
Sportsman's Warehouse is unprofitable with operating losses of -37.4M and net losses declining 51.4% YoY, while revenue growth stagnates at 1.0%, indicating fundamental business deterioration. The company faces acute financial distress with only 1.7M in cash and negative interest coverage of -2.7x, leaving minimal margin for error. While positive operating cash flow of 31.3M provides near-term runway, the trajectory is unsustainable without significant operational improvements.
Strengths
- Gross margin of 30.9% demonstrates acceptable product-level economics and pricing power
- Positive operating cash flow of 31.3M and free cash flow of 8.9M provide liquidity runway despite unprofitability
- Conservative leverage with Debt/Equity of 0.23x and moderate absolute debt load of 44.2M
Risks
- Unprofitable core operations with -37.4M operating loss and -50.1M net loss deteriorating 51.4% YoY
- Critically low cash position of 1.7M creates severe vulnerability to disruptions or unexpected challenges
- Revenue growth of only 1.0% YoY is insufficient to offset operating losses or drive profitability improvement
- Negative interest coverage ratio of -2.7x indicates company cannot service debt obligations from operating earnings
- Shareholder value destruction with diluted EPS of -1.30, down 49.4% YoY
Key Metrics to Watch
- Operating margin progression - must turn positive from current -3.1% to demonstrate viability
- Cash position and burn rate - critical to monitor at 1.7M reserve level
- Revenue growth acceleration - 1.0% is insufficient; needs 5%+ growth minimum
- Operating leverage improvement - 373.5M gross profit should support positive operating income
Financial Metrics
Revenue
1.2B
Net Income
-50.1M
EPS (Diluted)
$-1.30
Free Cash Flow
8.9M
Total Assets
762.6M
Cash
1.7M
Profitability Ratios
Gross Margin
30.9%
Operating Margin
-3.1%
Net Margin
-4.1%
ROE
-26.5%
ROA
-6.6%
FCF Margin
0.7%
Balance Sheet & Liquidity
Current Ratio
1.36x
Quick Ratio
1.36x
Debt/Equity
0.23x
Debt/Assets
75.3%
Interest Coverage
-2.72x
Long-term Debt
44.2M
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: 2026-04-16T12:27:26.945742 |
Data as of: 2026-01-31 |
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