Investment Thesis
Weyerhaeuser faces fundamental deterioration with revenue declining 3.1% YoY while negative free cash flow of -$60M indicates the company is spending more on capital expenditures than generating from operations, unsustainable for a REIT model. Combined with abysmal returns (ROE 1.7%, ROA 1.0%), EPS collapse of -16.7%, and modest operating margins of 14.3%, the company lacks pricing power and operational efficiency to justify current capital deployment.
Strengths
- Moderate leverage at 0.54x debt/equity, reasonable for REIT sector
- Adequate interest coverage ratio of 3.7x demonstrates near-term debt servicing capability
- Current ratio of 1.42x provides acceptable short-term liquidity buffer
Risks
- Negative free cash flow of -$60M (-3.5% margin) with capex exceeding operating cash flow by $60M, threatening dividend sustainability
- Revenue declining -3.1% YoY while EPS collapses -16.7%, indicating margin compression and share dilution
- Abysmal returns on capital with ROE of 1.7% and ROA of 1.0%, signaling poor asset utilization and value destruction
- Quick ratio of 0.80x below 1.0x threshold suggests potential liquidity stress if working capital tightens
- Net income flat despite revenue decline indicates deteriorating operational efficiency
Key Metrics to Watch
- Free cash flow trend and capex/operating cash flow ratio for sustainability
- Revenue growth trajectory and segment margin changes
- Return on equity and return on assets recovery path
Financial Metrics
Revenue
1.7B
Net Income
156.0M
EPS (Diluted)
$0.22
Free Cash Flow
-60.0M
Total Assets
16.4B
Cash
299.0M
Profitability Ratios
Gross Margin
18.4%
Operating Margin
14.3%
Net Margin
9.0%
ROE
1.7%
ROA
1.0%
FCF Margin
-3.5%
Balance Sheet & Liquidity
Current Ratio
1.42x
Quick Ratio
0.80x
Debt/Equity
0.54x
Debt/Assets
42.4%
Interest Coverage
3.74x
Long-term Debt
5.1B
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: 2026-05-06T19:18:02.328248 |
Data as of: 2026-03-31 |
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