Investment Thesis
US Physical Therapy faces structural operational challenges with zero revenue growth, negative free cash flow (-1.6M), and razor-thin net margins of 2.5%. Despite 26% net income growth, sharply declining EPS (-22.8%) signals substantial shareholder dilution, indicating the company is struggling to maintain operations without capital destruction.
Strengths
- Net income grew 26% YoY, showing some profitability improvement
- Moderate leverage with 0.41x debt/equity ratio and acceptable interest coverage of 6.0x
- Current ratio of 1.19x provides adequate short-term liquidity for operational continuity
Risks
- Negative free cash flow (-1.6M) indicates cash burn despite operational status - unsustainable long-term
- Revenue flatlined at 0.0% YoY growth, indicating loss of market share or stalled expansion in healthcare services
- Extremely poor returns: 1.1% ROE and 0.4% ROA reflect severe operational inefficiency and asset underutilization
- EPS declining 22.8% despite net income growth signals excessive shareholder dilution masking operational weakness
- Minimal cash position (28.4M) relative to 194M long-term debt limits financial flexibility and refinancing options
Key Metrics to Watch
- Free cash flow trajectory - critical inflection point for business viability
- Operating cash flow to revenue ratio - current 1.9% is unsustainably low
- Revenue growth rate - must return to positive growth to service debt sustainably
Financial Metrics
Revenue
198.3M
Net Income
5.0M
EPS (Diluted)
$-0.12
Free Cash Flow
-1.6M
Total Assets
1.2B
Cash
28.4M
Profitability Ratios
Gross Margin
16.5%
Operating Margin
6.3%
Net Margin
2.5%
ROE
1.1%
ROA
0.4%
FCF Margin
-0.8%
Balance Sheet & Liquidity
Current Ratio
1.19x
Quick Ratio
1.19x
Debt/Equity
0.41x
Debt/Assets
37.0%
Interest Coverage
6.00x
Long-term Debt
194.0M
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: 2026-05-09T09:12:01.056951 |
Data as of: 2026-03-31 |
Powered by Claude AI