Investment Thesis
UWMC exhibits critical fundamental deterioration with net income collapsing 88.8% YoY despite 18.2% revenue growth, indicating severe margin compression. The company cannot cover its interest obligations (0.9x coverage ratio) from operating income, and negative operating cash flow of -2.2B demonstrates the business is destroying cash despite reported profitability, raising acute solvency concerns.
Strengths
- Revenue growth of 18.2% YoY indicates market demand and volume expansion
- Operating margin of 19.7% demonstrates core lending operations can generate profits before debt service
- Cash reserves of $424M provide near-term liquidity buffer
Risks
- Interest coverage of 0.9x is critical - company cannot cover debt service from operations, indicating default risk
- Operating cash flow of -2.2B shows business burns cash despite positive accounting earnings, suggesting non-cash revenues or unsustainable profitability
- Net income collapsed 88.8% YoY while revenue grew - massive margin compression indicates structural business deterioration or one-time charges
Key Metrics to Watch
- Operating cash flow recovery and return to positive territory
- Interest coverage ratio trajectory - must exceed 1.5x for financial stability
- Net margin stabilization and underlying profitability sustainability
Financial Metrics
Revenue
901.4M
Net Income
25.3M
EPS (Diluted)
$0.09
Free Cash Flow
-2.2B
Total Assets
19.3B
Cash
424.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
19.7%
Net Margin
2.8%
ROE
1.6%
ROA
0.1%
FCF Margin
-249.5%
Balance Sheet & Liquidity
Current Ratio
0.05x
Quick Ratio
0.05x
Debt/Equity
1.86x
Debt/Assets
91.7%
Interest Coverage
0.86x
Long-term Debt
3.0B
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: 2026-05-12T07:22:52.310896 |
Data as of: 2026-03-31 |
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