Investment Thesis
Ultralife Corp is fundamentally unprofitable with flat revenue growth and negative operating margins, indicating core business weakness. Despite positive free cash flow and reasonable liquidity, the company's inability to cover interest expense from operations and deteriorating EPS signal deteriorating financial health. Without revenue growth or a clear path to operating profitability, the business faces structural challenges.
Strengths
- Positive free cash flow generation ($1.5M) despite operating losses
- Strong liquidity position with 2.56x current ratio and 1.23x quick ratio
- Conservative debt/equity ratio of 0.34x with adequate balance sheet cushion
Risks
- Negative interest coverage ratio (-1.1x) means operating income cannot cover debt service obligations
- Zero revenue growth (flat YoY) with worsening profitability indicates declining business viability
- Deteriorating diluted EPS (-3.00, -192% YoY) reflects shareholder value destruction and potential continued losses
Key Metrics to Watch
- Operating margin trend toward profitability (currently -0.5%)
- Revenue growth rate and gross margin sustainability (currently 21.3%)
- Interest coverage ratio improvement from current negative status
- Operating cash flow sustainability and free cash flow conversion
Financial Metrics
Revenue
47.4M
Net Income
-451.0K
EPS (Diluted)
$-3.00
Free Cash Flow
1.5M
Total Assets
220.6M
Cash
8.9M
Profitability Ratios
Gross Margin
21.3%
Operating Margin
-0.5%
Net Margin
-1.0%
ROE
-0.3%
ROA
-0.2%
FCF Margin
3.1%
Balance Sheet & Liquidity
Current Ratio
2.56x
Quick Ratio
1.23x
Debt/Equity
0.34x
Debt/Assets
41.2%
Interest Coverage
-1.09x
Long-term Debt
44.2M
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: 2026-05-10T07:52:49.792343 |
Data as of: 2026-03-31 |
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