Investment Thesis
TTM Technologies exhibits fundamental deterioration masked by GAAP profitability. Despite $846M in revenue and $50M net income, the company generated negative $85.1M free cash flow, indicating unsustainable capital burn. Stagnant revenue and earnings growth combined with critically low returns on equity (2.7%) and assets (1.3%) suggest poor capital efficiency and competitive pressure in the PCB sector.
Strengths
- Solid liquidity with current ratio of 1.88x and quick ratio of 1.61x
- Adequate cash position of $410M provides near-term operational buffer
- Moderate leverage with debt-to-equity of 0.50x is manageable within industry context
- Acceptable operating margin of 8.6% demonstrates profitability on GAAP basis
Risks
- Severe cash flow deterioration with negative FCF of $85.1M despite GAAP profitability indicates working capital drain or unsustainable capex
- Complete revenue stagnation (0% YoY growth) with no earnings growth signals loss of competitive positioning in cyclical PCB market
- Critically low return metrics (ROE 2.7%, ROA 1.3%) reveal poor capital efficiency despite $4.0B asset base
- High capital expenditure of $106.8M relative to operating cash flow of $21.7M is structurally unsustainable without external financing
- Interest coverage of 3.0x provides limited cushion if operating cash flow continues deteriorating
Key Metrics to Watch
- Free cash flow trajectory and operating cash flow sustainability
- Revenue growth rate and market share trends in PCB sector
- Capital expenditure requirements and return on incremental investments
- Working capital metrics and days sales outstanding changes
- Debt refinancing needs and leverage ratios if cash burn persists
Financial Metrics
Revenue
846.0M
Net Income
50.0M
EPS (Diluted)
$0.47
Free Cash Flow
-85.1M
Total Assets
4.0B
Cash
410.0M
Profitability Ratios
Gross Margin
21.4%
Operating Margin
8.6%
Net Margin
5.9%
ROE
2.7%
ROA
1.3%
FCF Margin
-10.1%
Balance Sheet & Liquidity
Current Ratio
1.88x
Quick Ratio
1.61x
Debt/Equity
0.50x
Debt/Assets
0.0%
Interest Coverage
2.95x
Long-term Debt
915.7M
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: 2026-05-06T16:32:49.292139 |
Data as of: 2026-03-30 |
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