Investment Thesis
While Spire demonstrates operational discipline with growing net income (+5.9% YoY) and solid 22.8% operating margins despite a 4.5% revenue decline, the company faces severe cash flow challenges: negative free cash flow of -121.8M, only 4.1M in cash, and deteriorating liquidity (0.61x current ratio) combined with 1.30x leverage create refinancing and capital funding risks.
Strengths
- Net income growth of 5.9% YoY despite revenue decline demonstrates operational efficiency and cost control
- Solid operating margin of 22.8% indicates effective expense management for a utility operator
- Positive operating cash flow of 81.0M provides foundational debt service capacity
Risks
- Severe negative free cash flow of -121.8M indicates capital spending significantly exceeds operating cash generation and is unsustainable
- Critically low cash position (4.1M) combined with 4.4B long-term debt and sub-1.0 current ratio signal acute liquidity stress
- Interest coverage of 2.9x leaves minimal margin for refinancing risk or external shocks in the debt markets
Key Metrics to Watch
- Free cash flow trajectory and capital expenditure reduction plans
- Debt refinancing activity and access to capital markets
- Revenue stabilization and operating margin sustainability
Financial Metrics
Revenue
762.2M
Net Income
95.0M
EPS (Diluted)
$1.54
Free Cash Flow
-121.8M
Total Assets
11.9B
Cash
4.1M
Profitability Ratios
Gross Margin
N/A
Operating Margin
22.8%
Net Margin
12.5%
ROE
2.8%
ROA
0.8%
FCF Margin
-16.0%
Balance Sheet & Liquidity
Current Ratio
0.61x
Quick Ratio
0.61x
Debt/Equity
1.30x
Debt/Assets
0.0%
Interest Coverage
2.87x
Long-term Debt
4.4B
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: 2026-04-16T13:51:22.868441 |
Data as of: 2025-12-31 |
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