Investment Thesis
U-Haul exhibits deteriorating fundamentals despite explosive revenue growth, with net income declining 41.6% YoY and negative free cash flow of -$1.2B indicating the business cannot fund its capital intensity from operations. Exceptionally weak returns (ROE 2.7%, ROA 1.0%) and thin interest coverage (1.9x) against $8.1B debt load create sustainability concerns.
Strengths
- Strong positive operating cash flow of $1.4B demonstrates operational liquidity
- Substantial revenue growth of 693% YoY shows market demand recovery
- Reasonable operating margin of 10.7% on core business operations
Risks
- Negative free cash flow of -$1.2B is unsustainable and exceeds cash reserves of $1.0B annually
- Net income decline of 41.6% YoY despite massive revenue growth signals deteriorating profitability and earnings quality concerns
- Extremely low returns on equity (2.7%) and assets (1.0%) indicate poor capital efficiency and value destruction
- Interest coverage ratio of 1.9x is critically thin with $8.1B debt burden, limiting margin for operational stress
- Capital-intensive business model requires perpetual $2.6B+ capex that exceeds operating cash generation
Key Metrics to Watch
- Free cash flow trajectory and path to positive FCF generation
- Return on equity improvement relative to debt serviceability
- Interest coverage ratio and debt refinancing risk
- Net income sustainability relative to revenue growth quality
Financial Metrics
Revenue
4.8B
Net Income
210.9M
EPS (Diluted)
$0.00
Free Cash Flow
-1.2B
Total Assets
21.6B
Cash
1.0B
Profitability Ratios
Gross Margin
N/A
Operating Margin
10.7%
Net Margin
4.4%
ROE
2.7%
ROA
1.0%
FCF Margin
-25.4%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
1.04x
Debt/Assets
64.2%
Interest Coverage
1.90x
Long-term Debt
8.1B
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: 2026-04-18T05:00:24.345471 |
Data as of: 2025-12-31 |
Powered by Claude AI