Investment Thesis
Despite strong 32.4% revenue growth and 55.4% operating margins, Strawberry Fields REIT exhibits severe financial distress. Net income collapsed 77.3% YoY with critically weak interest coverage of 1.7x, while an extreme Debt/Equity ratio of 64.73x and minimal equity cushion (12.2M vs 828M liabilities) create acute refinancing and default risk.
Strengths
- Strong revenue growth of 32.4% YoY indicates market demand
- Exceptional operating margin of 55.4% demonstrates operational efficiency
- Positive operating cash flow of 17.5M provides some debt service capacity
Risks
- Extreme leverage with Debt/Equity ratio of 64.73x creates existential refinancing risk
- Profitability declining sharply with net income down 77.3% YoY despite revenue growth
- Interest coverage of 1.7x is dangerously low and insufficient for REIT debt obligations
- Equity base of 12.2M is critically undercapitalized relative to 828M total liabilities
- 50% gap between operating margin (55.4%) and net margin (5.7%) indicates unsustainable debt burden
Key Metrics to Watch
- Interest coverage ratio - deterioration signals default risk
- Debt-to-Equity trajectory - whether company is deleveraging
- Net income stabilization - continuation of decline is untenable
- Cash flow adequacy for debt service and REIT distributions
- Equity capital raising efforts or asset sales
Financial Metrics
Revenue
40.0M
Net Income
2.3M
EPS (Diluted)
$0.17
Free Cash Flow
17.5M
Total Assets
878.6M
Cash
36.6M
Profitability Ratios
Gross Margin
N/A
Operating Margin
55.4%
Net Margin
5.7%
ROE
18.6%
ROA
0.3%
FCF Margin
43.8%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
64.73x
Debt/Assets
94.2%
Interest Coverage
1.75x
Long-term Debt
791.4M
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: 2026-05-10T07:47:53.073038 |
Data as of: 2026-03-31 |
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