Investment Thesis
Terex is in operational crisis with negative net income (-$89M, -34% YoY), negative operating cash flow (-$31M), and free cash flow deterioration (-$57M). The company is unprofitable across all metrics while carrying $2.7B debt that it cannot service from operations (interest coverage: -0.5x), making continued cash burn and potential covenant violations material risks.
Strengths
- Reasonable debt-to-equity ratio at 0.57x provides balance sheet flexibility
- Current ratio of 1.84x indicates short-term liquidity cushion of $392M cash
- Revenue stability at $1.7B YoY suggests demand floor, though highly insufficient given losses
Risks
- Severe cash burn: negative operating cash flow of -$31M and free cash flow of -$57M indicate unsustainable capital structure
- Deteriorating profitability: net income declined 34% YoY with negative margins across gross (-4.7% operating, -5.1% net) signaling structural margin compression
- Debt servicing crisis: negative interest coverage ratio (-0.5x) means operations cannot cover debt obligations; 39 Form 4 filings suggest internal instability or hedging
Key Metrics to Watch
- Operating cash flow trajectory and path to positive inflection
- Operating margin recovery and gross margin stabilization
- Revenue growth return and debt refinancing/covenant compliance status
Financial Metrics
Revenue
1.7B
Net Income
-89.0M
EPS (Diluted)
$-0.93
Free Cash Flow
-57.0M
Total Assets
10.2B
Cash
392.0M
Profitability Ratios
Gross Margin
11.9%
Operating Margin
-4.7%
Net Margin
-5.1%
ROE
-1.8%
ROA
-0.9%
FCF Margin
-3.3%
Balance Sheet & Liquidity
Current Ratio
1.84x
Quick Ratio
0.88x
Debt/Equity
0.57x
Debt/Assets
52.7%
Interest Coverage
-0.46x
Long-term Debt
2.7B
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: 2026-05-06T19:51:00.783138 |
Data as of: 2026-03-31 |
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