Investment Thesis
Trinseo is in severe financial distress with negative stockholders' equity of -$1.1B, indicating technical insolvency. The company generated massive operating losses of -$254.2M on declining revenues (-15.3% YoY), with negative free cash flow of -$153.4M and interest coverage of -8.8x, making debt service unsustainable.
Strengths
- Maintains $146.7M cash reserve providing short-term liquidity buffer
- Current ratio of 1.21x indicates ability to meet immediate obligations
- Gross profit of $165.9M suggests some underlying business economics exist
Risks
- Negative stockholders' equity of -$1.1B signals balance sheet insolvency and potential covenant violations
- Operating losses of -$254.2M with negative interest coverage of -8.8x make debt sustainability questionable
- Negative operating and free cash flow of -$102.4M and -$153.4M respectively indicate ongoing value destruction
- Revenue declining 15.3% YoY combined with 5.6% gross margins suggests structural competitive pressures
- Net margin of -18.3% and negative ROA of -23.9% indicate comprehensive operational deterioration
- Debt of $2.5B cannot be serviced from operations in current state
Key Metrics to Watch
- Stockholders equity recovery trajectory and covenant compliance
- Operating cash flow return to positive territory
- Revenue stabilization and gross margin improvement
- Debt refinancing capability and maturity schedule
Financial Metrics
Revenue
3.0B
Net Income
-545.6M
EPS (Diluted)
$-15.24
Free Cash Flow
-153.4M
Total Assets
2.3B
Cash
146.7M
Profitability Ratios
Gross Margin
5.6%
Operating Margin
-8.5%
Net Margin
-18.3%
ROE
N/A
ROA
-23.9%
FCF Margin
-5.2%
Balance Sheet & Liquidity
Current Ratio
1.21x
Quick Ratio
0.77x
Debt/Equity
N/A
Debt/Assets
0.0%
Interest Coverage
-8.81x
Long-term Debt
2.5B
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: 2026-04-17T21:24:19.836735 |
Data as of: 2025-12-31 |
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