Investment Thesis
Tecnoglass shows revenue growth of 10.5% YoY but earnings are stagnant, indicating margin compression or operational challenges. Most critically, the company generated negative free cash flow of -$10.5M despite $31.9M in net income, revealing poor cash conversion quality and a $25.2M gap between reported earnings and operating cash flow.
Strengths
- Revenue growth of 10.5% YoY demonstrates market demand for products
- Conservative leverage with 0.28x debt-to-equity ratio provides financial flexibility
- Solid gross margin of 38.5% and operating margin of 18.0% show pricing power and operational efficiency at those levels
Risks
- Negative free cash flow of -$10.5M signals deteriorating cash generation despite profitability; capex of $17.3M far exceeds operating cash flow of $6.7M
- Net income flat YoY (+0.0%) and diluted EPS declining (-0.3%) despite revenue growth indicates margin compression or quality of earnings concerns
- Very low returns on equity (4.3%) and assets (2.3%) suggest inefficient capital deployment and poor shareholder value generation
Key Metrics to Watch
- Operating cash flow trend and quality of earnings (reconcile $25.2M gap between net income and OCF)
- Free cash flow return to positive territory and capex sustainability relative to OCF
- Net margin trajectory and whether earnings can grow with revenue in future periods
Financial Metrics
Revenue
249.0M
Net Income
31.9M
EPS (Diluted)
$0.71
Free Cash Flow
-10.5M
Total Assets
1.4B
Cash
91.1M
Profitability Ratios
Gross Margin
38.5%
Operating Margin
18.0%
Net Margin
12.8%
ROE
4.3%
ROA
2.3%
FCF Margin
-4.2%
Balance Sheet & Liquidity
Current Ratio
1.77x
Quick Ratio
1.15x
Debt/Equity
0.28x
Debt/Assets
46.0%
Interest Coverage
N/A
Long-term Debt
203.0M
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: 2026-05-09T13:24:31.682492 |
Data as of: 2026-03-31 |
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