Investment Thesis
USANA demonstrates a severe operational deterioration with net income collapsing 72.7% YoY despite 8.3% revenue growth, indicating margin compression and cost control failures. While the company maintains a fortress balance sheet with no debt and $162.8M cash, weak operating cash flow of $9.8M and minimal 3.0% net margins signal fundamental business challenges that outweigh financial stability.
Strengths
- Exceptional gross margin of 76.2% demonstrates strong product pricing power and cost control at production level
- Fortress balance sheet with zero long-term debt and $162.8M cash provides strategic flexibility and downside protection
- Strong liquidity metrics (2.51x current ratio, 1.69x quick ratio) ensure short-term financial stability and operational continuity
Risks
- Net income and EPS collapsed 72-73% YoY despite revenue growth, indicating severe operational dysfunction or one-time charges
- Anemic profitability with 3.0% net margin and 5.5% operating margin leaves minimal cushion for market volatility
- Weak cash generation with $9.8M operating cash flow and $7.1M free cash flow is insufficient for sustainable business operations
- Dramatically poor returns on equity (1.4%) and assets (1.0%) suggest capital is being deployed inefficiently
Key Metrics to Watch
- Operating cash flow trend and path to $15M+ annual OCF sustainability
- Net margin recovery trajectory and operating expense rationalization
- Insider Form 4 filing volume and directionality (sells vs. buys) as signal of management confidence
Financial Metrics
Revenue
250.2M
Net Income
7.5M
EPS (Diluted)
$0.41
Free Cash Flow
7.1M
Total Assets
739.0M
Cash
162.8M
Profitability Ratios
Gross Margin
76.2%
Operating Margin
5.5%
Net Margin
3.0%
ROE
1.4%
ROA
1.0%
FCF Margin
2.8%
Balance Sheet & Liquidity
Current Ratio
2.51x
Quick Ratio
1.69x
Debt/Equity
0.00x
Debt/Assets
19.5%
Interest Coverage
266.81x
Long-term Debt
N/A
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: 2026-05-13T07:06:51.858138 |
Data as of: 2026-04-04 |
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