Investment Thesis
Interactive Strength demonstrates strong revenue growth (+114% YoY) but operates with an unsustainable financial structure: the company is deeply unprofitable (-207.9% net margin), faces a critical liquidity crisis (0.47x current ratio with only $512K cash), and carries extreme leverage (7.27x debt-to-equity). At current cash burn rates, the company has insufficient runway to reach profitability.
Strengths
- Strong revenue growth of 114% YoY indicates market demand for products
- Positive revenue generation of $11.5M demonstrates operational capability
- Operating in electronic equipment sector with potential for further expansion
Risks
- Critical liquidity crisis: 0.47x current ratio, 0.24x quick ratio, only $512K cash on hand with ~$10.5M annual cash burn
- Extreme leverage: $46.4M long-term debt versus $6.4M stockholders' equity (7.27x debt/equity ratio) creates refinancing risk
- Chronic unprofitability: -207.9% net margin, -172.2% operating margin, and -$10.5M free cash flow burn unsustainable long-term
- Severely depressed gross margin of 7.9% indicates fundamental cost structure or pricing power issues preventing profitability at scale
- Liabilities ($38.1M) exceed equity ($6.4M), indicating insolvency risk and diminished equity value
Key Metrics to Watch
- Cash position and monthly burn rate - determines time to insolvency
- Gross margin trend - critical for path to profitability
- Operating cash flow progression - identifies if operations approach breakeven
Financial Metrics
Revenue
11.5M
Net Income
-24.0M
EPS (Diluted)
$-171.77
Free Cash Flow
-10.5M
Total Assets
46.8M
Cash
512.0K
Profitability Ratios
Gross Margin
7.9%
Operating Margin
-172.2%
Net Margin
-207.9%
ROE
-375.1%
ROA
-51.2%
FCF Margin
-91.1%
Balance Sheet & Liquidity
Current Ratio
0.47x
Quick Ratio
0.24x
Debt/Equity
7.27x
Debt/Assets
81.4%
Interest Coverage
N/A
Long-term Debt
46.4M
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: 2026-04-17T19:45:23.208018 |
Data as of: 2025-12-31 |
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