RF

RF Industries Ltd

RFIL

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RF Industries Ltd AI Insights

Informational only. Not investment advice.
As of 2025-12-16

Snapshot

  • Goodwill/intangibles of 19.9M represent 57% of equity (34.8M) - acquisition-heavy strategy with impairment risk if growth stalls[Goodwill and Other Intangible Assets]
  • FCF of 1.9M TTM positive despite -336K net loss - non-cash charges masking operational cash generation[Free Cash Flow TTM]
  • Debt/equity 0.78 with 27M total debt vs 3M cash - leverage elevated for a company with negative earnings[Debt to Equity]

Watch Triggers

  • Gross Margin TTM: Falls below 30%Already 10pts below industry - further erosion signals competitive disadvantage
  • Total Revenue TTM: Quarterly revenue growth turns positiveReversal of 3Y decline would validate turnaround thesis
  • Total Debt: Exceeds 30M or debt/equity >1.0Leverage already elevated for loss-making company

Bull Case

Asset turnover 1.05x exceeds industry median 0.58x - efficient capital deployment generates 76M revenue from 73M assets

Asset Turnover TTMTotal Assets

P/S 0.83x vs industry median 3.0x - trading at 72% discount if margins normalize to industry 2.4% operating

P/S RatioOperating Margin TTM

Bear Case

EPS declined 21% over 3Y with current -$0.03 loss - no dividend capacity and equity erosion risk

EPS TTMEPS Growth 3Y

Gross margin 31.7% below industry median 41.6% - structural cost disadvantage limits pricing power

Gross Margin TTM

Bull vs Bear Balance

AI-generated sentiment analysis based on fundamental metrics and market conditions.

BearBull
35%

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Forward Thesis

Turnaround hinges on revenue stabilization - 3Y revenue declined 6% while 5Y grew 15.7%

1-3ylow
  • Recent revenue contraction reversing prior growth trajectory
  • Operating margin 1.3% leaves no buffer for further decline
  • 27M debt requires servicing regardless of top-line
Revenue 3Y CAGR: -6.0%Revenue 5Y CAGR: +15.7%Operating margin TTM: 1.3%

Valuation Context

Caveats

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Fundamental company data provided by Morningstar, updated daily.

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