Atlantic International Corp. (NASDAQ: ATLN)

Sector: Industrials Industry: Staffing & Employment Services CIK: 0001605888
Market Cap 133.38 Mn
P/B -6.04
P/E -1.32
P/S 0.30
ROIC (Qtr) -118.90
Div Yield % 0.00
Rev 1y % (Qtr) 2.16
Total Debt (Qtr) 78.61 Mn
Debt/Equity (Qtr) -3.56
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About

Investment thesis

Bull case

  • Robust free cash flow of 3.29M exceeds capital expenditure of 67579 by 48.66x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 82.46M provides 6.10x coverage of working capital 13.51M, indicating strong operational backing.
  • Retained earnings of (167.76M) represent substantial 7.60x of equity (22.06M), indicating strong internal capital generation.
  • Strong tangible asset base of 82.46M provides 2.97x coverage of intangibles 27.80M, indicating robust asset quality.
  • Operating cash flow of 3.36M provides strong 49.66x coverage of capital expenditure 67579, enabling organic growth.

Bear case

  • Operating cash flow of 3.36M barely covers its investment activities of (67579), with a coverage ratio of -49.66, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of 3.36M shows concerning coverage of stock compensation expenses of 59.43M, with a 0.06 ratio indicating potential earnings quality issues.
  • Operating earnings of (68.88M) show weak coverage of depreciation charges of 6.19M, with a -11.13 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 3.36M provides minimal 0.13x coverage of tax expenses of 25.14M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 3.29M represents just -0.71x of debt issuance (4.60M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Staffing & Employment Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TNET Trinet Group, Inc. 2.92 Bn 13.22 0.86 0.94 Bn
2 KFY Korn Ferry 2.76 Bn 66.66 3.91 0.55 Bn
3 RHI Robert Half Inc. 2.48 Bn 18.65 0.46 0.25 Bn
4 MAN ManpowerGroup Inc. 1.76 Bn 3.55 0.08 1.64 Bn
5 KFRC Kforce Inc 1.11 Bn -12.63 1.14 0.07 Bn
6 BBSI Barrett Business Services Inc 0.94 Bn 17.65 1.01 0.03 Bn
7 NSP Insperity, Inc. 0.92 Bn -131.16 0.13 0.44 Bn
8 KELYA Kelly Services Inc 0.33 Bn -1.29 0.08 0.16 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.91 0.72
EV to Cash from Ops. EV/CFO 62.84 13.34
EV to Debt EV to Debt 2.68 16.96
EV to EBIT EV/EBIT -3.06 6.77
EV to EBITDA EV/EBITDA -3.36 5.70
EV to Free Cash Flow [EV/FCF] EV/FCF 64.14 27.09
EV to Market Cap EV to Market Cap 1.58 0.88
EV to Revenue EV/Rev 0.47 0.75
Price to Book Value [P/B] P/B -6.04 2.96
Price to Earnings [P/E] P/E -1.32 -37.77
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.44
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -81.87
Dividend per Basic Share Div per Share (Qtr) 0.00 0.84
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 115.87
Interest Coverage Int. cover (Qtr) -9.96 -11.60
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -41.46 24.71
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -94.03 155.53
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 35.43
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -51.93 -2,529.64
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -123.88 -29.98
EBIT Growth (1y) % EBIT 1y % (Qtr) 12.43 -51.52
EBT Growth (1y) % EBT 1y % (Qtr) 19.44 -79.33
EPS Growth (1y) % EPS 1y % (Qtr) 11.11 -2,182.39
FCF Growth (1y) % FCF 1y % (Qtr) 118.99 229.47
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 4.13 12.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 4.04 1.87
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.36
Cash Ratio Cash Ratio (Qtr) 0.00 0.80
Current Ratio Curr Ratio (Qtr) 1.23 1.85
Debt to Equity Ratio Debt/Equity (Qtr) -3.56 1.53
Interest Cover Ratio Int Coverage (Qtr) -9.96 -11.60
Times Interest Earned Times Interest Earned (Qtr) -9.96 -11.60
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -14.10 -8.99
EBIT Margin % EBIT Margin % (Qtr) -15.47 -51.06
EBT Margin % EBT Margin % (Qtr) -17.02 -11.99
Gross Margin % Gross Margin % (Qtr) 10.90 33.35
Net Profit Margin % Net Margin % (Qtr) -22.70 -13.87