Investment Thesis
Workhorse Group exhibits severe financial distress with negative gross margins (-172.8%), indicating the core business is unprofitable at current production levels. With only $600K in cash and negative operating cash flow of -$16.5M annually, the company faces an imminent liquidity crisis with mere weeks of runway. Despite 201% revenue growth, profitability metrics are deeply negative across all measures, signaling fundamental operational challenges.
Strengths
- High revenue growth of 201% YoY demonstrates market demand or production ramp
- Moderate debt-to-equity ratio of 0.60x provides some structural flexibility
- Assets of $102.7M represent potential collateral or liquidation value
Risks
- Critical liquidity crisis: $600K cash with $16.5M annual cash burn leaves only 2-3 weeks of runway at current burn rate
- Negative gross margin of -172.8% indicates core business model is broken; company loses money on every unit sold
- Quick ratio of 0.25x shows severe inability to meet short-term obligations; negative interest coverage means operations cannot service debt
Key Metrics to Watch
- Cash position and burn rate - survival contingent on external capital injection within 30 days
- Gross margin progression - must reach positive territory for any operational viability
- Operating cash flow trend - path to breakeven is only viable with substantial scaling or cost restructuring
Financial Metrics
Revenue
4.3M
Net Income
-19.9M
EPS (Diluted)
$-1.99
Free Cash Flow
-16.6M
Total Assets
102.7M
Cash
600.0K
Profitability Ratios
Gross Margin
-172.8%
Operating Margin
-487.3%
Net Margin
-459.3%
ROE
-75.9%
ROA
-19.4%
FCF Margin
-384.4%
Balance Sheet & Liquidity
Current Ratio
1.23x
Quick Ratio
0.25x
Debt/Equity
0.60x
Debt/Assets
74.5%
Interest Coverage
-0.11x
Long-term Debt
15.7M
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: 2026-05-23T09:42:01.015293 |
Data as of: 2026-03-31 |
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