Royalty Management Holding Corp (NASDAQ: RMCO)

Sector: Financial Services Industry: Asset Management CIK: 0001843656
Market Cap 137.25 Mn
P/B -62.29
P/E -393.00
P/S 36.13
ROIC (Qtr) -1.94
Div Yield % 0.06
Rev 1y % (Qtr) 794.59
Total Debt (Qtr) 354,086.00
Debt/Equity (Qtr) 0.03
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About

Investment thesis

Bull case

  • Healthy cash reserves of 368524 provide 10.21x coverage of short-term debt 36087, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 16.08M provides 45.40x coverage of total debt 354086, indicating robust asset backing and low credit risk.
  • Strong free cash flow of (276615) provides 25.46x coverage of acquisition spending (10864), indicating disciplined M&A strategy.
  • Long-term investments of 11.94M provide solid 37.54x coverage of long-term debt 317999, indicating strategic financial planning.
  • Robust tangible asset base of 16.08M provides 67.24x coverage of working capital 239111, indicating strong operational backing.

Bear case

  • Operating cash flow of (266115) barely covers its investment activities of 997, with a coverage ratio of -266.92, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 368524 provide limited coverage of acquisition spending of (10864), which is -33.92x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of (266115) shows concerning coverage of stock compensation expenses of 27625, with a -9.63 ratio indicating potential earnings quality issues.
  • Free cash flow of (276615) provides weak coverage of capital expenditures of 10500, with a -26.34 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of (323221) show weak coverage of depreciation charges of 78652, with a -4.11 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Asset Management
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 BLK BlackRock, Inc. 199.59 Bn 85.40 21.98 15.04 Bn
2 BN BROOKFIELD Corp /ON/ 103.94 Bn 31.52 5.64 262.97 Bn
3 AMP Ameriprise Financial Inc 88.69 Bn 55.02 7.20 5.89 Bn
4 BX Blackstone Inc. 88.51 Bn 49.39 10.93 12.89 Bn
5 KKR KKR & Co. Inc. 55.86 Bn 28.33 13.23 53.12 Bn
6 STT State Street Corp 46.52 Bn 21.77 3.91 34.72 Bn
7 NTRS Northern Trust Corp 34.14 Bn 33.31 6.71 15.64 Bn
8 RJF Raymond James Financial Inc 32.89 Bn 37.63 4.14 5.10 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 7.63 0.94
EV to Cash from Ops. EV/CFO -145.78 41.10
EV to Debt EV to Debt 388.38 15.28
EV to EBIT EV/EBIT -425.47 23.47
EV to EBITDA EV/EBITDA -682.08 47.80
EV to Free Cash Flow [EV/FCF] EV/FCF -145.78 38.62
EV to Market Cap EV to Market Cap 1.00 7.81
EV to Revenue EV/Rev 36.21 27.38
Price to Book Value [P/B] P/B -62.29 2.34
Price to Earnings [P/E] P/E -393.00 11.81
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -4.70 4.66
Dividend Payout Ratio % Div Payout % (Qtr) -50.00 -5.56
Dividend per Basic Share Div per Share (Qtr) 0.01 1.73
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -26.32 49.83
Interest Coverage Int. cover (Qtr) -12.42 25.16
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 91.60 -35.10
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 10.94 15.43
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.65
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -54.38 -90.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 34.76 35.24
EBIT Growth (1y) % EBIT 1y % (Qtr) -54.38 -22.13
EBT Growth (1y) % EBT 1y % (Qtr) 11.02 -163.05
EPS Growth (1y) % EPS 1y % (Qtr) -133.33 -20.61
FCF Growth (1y) % FCF 1y % (Qtr) -79.83 220.21
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 30.32 -53.96
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.22
Cash Payout Ratio Cash Payout (Qtr) -0.29 0.36
Cash Ratio Cash Ratio (Qtr) 0.11 0.38
Current Ratio Curr Ratio (Qtr) 1.07 0.86
Debt to Equity Ratio Debt/Equity (Qtr) 0.03 0.70
Interest Cover Ratio Int Coverage (Qtr) -12.42 25.16
Times Interest Earned Times Interest Earned (Qtr) -12.42 25.16
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -6.40 -114.76
EBIT Margin % EBIT Margin % (Qtr) -8.51 -127.24
EBT Margin % EBT Margin % (Qtr) -9.19 -150.97
Gross Margin % Gross Margin % (Qtr) 22.90 67.88
Net Profit Margin % Net Margin % (Qtr) -9.20 -148.68