Company Overview
Cadiz Inc. operates within the Utilities sector, specifically focusing on the Regulated Water industry, where it provides comprehensive water solutions throughout the United States. The company's business model encompasses two primary segments, Land and Water Resources, and Water Filtration Technology, offering essential services such as water supply, storage, conveyance, and filtration to its clients. In terms of scale, the organization maintains a market capitalization of $427.36M and employs a workforce of 25 individuals to support its operations. The reported annual revenue of $15.98M indicates that the company functions as a specialized player within the utility landscape rather than a massive utility conglomerate, suggesting a niche operational footprint.
Financial Health
The company reported a revenue of $15.98M over the trailing twelve months, yet it recorded a net income of $-38,126,000 and an EBITDA of $-23,615,000, revealing a significant gap between top-line revenue generation and bottom-line profitability. This substantial disparity highlights a cost structure where operating expenses and non-operating charges significantly erode earnings before interest and taxes. Furthermore, the free cash flow stands at $-18,032,876, which indicates that the company is currently consuming cash rather than generating liquidity for reinvestment or debt repayment. Analyzing the margins provides deeper insight into this financial distress; the gross margin is 32.5%, suggesting that the cost of goods sold consumes roughly two-thirds of revenue, while the operating margin of -118.0% and profit margin of -206.6% demonstrate severe operational and overall profitability losses. On the balance sheet, the company holds $4.43M in cash against total debt of $90.72M, resulting in a highly leveraged position with a debt-to-equity ratio of 327.13. This heavy reliance on debt financing exposes the entity to significant interest rate risks and potential solvency challenges during periods of economic stress. Liquidity is assessed via a current ratio of 1.26, which suggests the company possesses a modest buffer of current assets relative to current liabilities but remains tight. Finally, the return on equity is -136.4% and the return on assets is -12.9%, metrics that reveal management is currently destroying value rather than generating returns on the capital invested by shareholders or utilized in the asset base.
Valuation Assessment
Valuation metrics for Cadiz Inc. present a complex picture due to the lack of positive earnings; the P/E Ratio (TTM) is N/A, while the forward P/E is listed as -15.19, implying that the market is pricing in a negative earnings trajectory or a complete restructuring of profitability expectations. The price-to-book ratio stands at 15.06, indicating that the market is valuing the company's equity at a massive premium of over 15 times its book value, which is unusual for a firm with negative earnings. Additionally, the price-to-sales ratio is 26.74 and the EV/EBITDA is -21.57, suggesting that investors are paying a high multiple of sales and negative enterprise value multiples, likely anticipating a future turnaround that has not yet materialized in current financial statements. Price movement volatility is evident with a 52-week high of $6.96 and a 52-week low of $2.13, meaning the stock has experienced a substantial price range expansion of approximately 227% during the past year. The beta value of 2.11 confirms that the stock price is more than twice as volatile as the broader market, making it a high-risk asset for investors seeking stability.
Growth & Income
Revenue growth for the year-over-year period is 28.7%, while earnings growth is N/A, indicating that despite a significant expansion in sales, the company has not yet achieved positive earnings growth to match this top-line performance. Because the company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, the entity reinvests its limited financial resources back into operations rather than distributing cash to shareholders. The absence of a payout ratio suggests that the company is prioritizing capital preservation or debt reduction over income generation for investors. Overall, the growth and income profile is characterized by strong sales expansion coupled with persistent negative earnings and no current income distribution, reflecting a high-risk, high-volatility investment scenario.