Investment Thesis
Surf Air is a fundamentally broken business with negative stockholders equity (-$63.2M), severe liquidity crisis (0.16x current ratio), and catastrophic profitability (-79.1% net margin). Declining revenue (-10.8% YoY) combined with massive free cash flow burn (-$15.0M annually) against only $4.2M in cash creates imminent solvency risk.
Strengths
- Reported $120.8M in total assets provides some liquidation value cushion
- 12 Form 4 insider filings in 90 days may indicate management conviction, though in this context is concerning
- Non-scheduled air transport sector has addressable market if business model were viable
Risks
- Negative stockholders equity of -$63.2M represents technical insolvency; liabilities exceed assets by $56.6M
- Critical liquidity crisis: 0.16x current ratio with only $4.2M cash against significant operating burn rate
- Operating model fundamentally broken: -52.1% operating margin, -79.1% net margin, deteriorating profitability (-47.6% YoY)
- Negative free cash flow of -$15.0M annually with negative operating cash flow indicates unsustainable trajectory
- Revenue declining -10.8% YoY combined with negative leverage creates compounding financial distress
- Negative interest coverage ratio (-3.7x) indicates inability to service debt from operations
- Imminent dilution risk requiring capital raise or debt restructuring/bankruptcy
- Unable to invest in aircraft or operations given cash constraints
Key Metrics to Watch
- Cash runway and monthly burn rate - critical for bankruptcy risk assessment
- Revenue stabilization or continued decline - key to survival timeline
- Debt covenant compliance and refinancing options
- Capital raise announcements and resulting dilution percentage
Financial Metrics
Revenue
25.6M
Net Income
-20.3M
EPS (Diluted)
$-0.26
Free Cash Flow
-15.0M
Total Assets
120.8M
Cash
4.2M
Profitability Ratios
Gross Margin
N/A
Operating Margin
-52.1%
Net Margin
-79.1%
ROE
N/A
ROA
-16.8%
FCF Margin
-58.6%
Balance Sheet & Liquidity
Current Ratio
0.16x
Quick Ratio
0.16x
Debt/Equity
N/A
Debt/Assets
146.8%
Interest Coverage
-3.73x
Long-term Debt
16.5M
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: 2026-05-13T09:26:03.628801 |
Data as of: 2026-03-31 |
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