Flowco Holdings Inc. (FLOC) Stock Analysis
Flowco Holdings Inc. (FLOC) Stock Analysis
Overall Grade: F (Concerning)
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Flowco Holdings Inc. faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | 9.7% | Near cost of capital |
| FCF Margin | 22.0% | Strong cash generation |
| Debt/Equity | 0.7x | Moderate leverage |
Investment Thesis: Healthy free cash flow margin of 22.0% provides financial flexibility for growth and shareholder returns.
What is Flowco Holdings Inc.'s Profitability and ROIC?
Flowco Holdings Inc.'s return on invested capital of 9.7% is around industry norms. Gross margin of 54.4% with operating margin at 19.6% reflects the company's strong market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.7% | Adequate | Adequate returns |
| Return on Equity (ROE) | 0.1% | Warning | Moderate equity returns |
| Gross Margin | 54.4% | Excellent | Strong pricing power |
| Operating Margin | 19.6% | Good | Efficient operations |
How Strong is Flowco Holdings Inc.'s Cash Flow Quality?
Flowco Holdings Inc. generated $167.1M in free cash flow over the trailing twelve months, representing a 22.0% margin. Cash earnings quality is strong, with operating cash flow exceeding net income by 4490.2x.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 22.0% | Excellent | Excellent cash conversion |
| Free Cash Flow (TTM) | $167.1M | Good | Positive cash generation |
| OCF/Net Income | 4490.2x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is Flowco Holdings Inc.'s Financial Health?
Flowco Holdings Inc.'s debt-to-equity ratio of 0.7x indicates moderate leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 0.7x | Adequate | Moderate leverage |
| Net Cash Position | $-163.3M | Adequate | Net debt position |
Is Flowco Holdings Inc. Stock Overvalued or Undervalued?
Flowco Holdings Inc. trades at a P/E of 7.7x, representing a premium to the sector median of N/A. Free cash flow yield of 33.4% offers attractive cash returns.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | 7.7x | Adequate | Reasonable valuation |
| EV/Sales | 1.0x | Excellent | Attractive revenue multiple |
| FCF Yield | 33.4% | Excellent | Attractive cash return |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 9.7% | Top 50% | 1.2x above |
| Free Cash Flow Margin | 22.0% | Top 5% | 4.1x above |
| Gross Margin | 54.4% | Top 25% | 1.6x above |
| Operating Margin | 19.6% | Top 25% | 2.4x above |
| Return on Equity (ROE) | 0.1% | Bottom 50% | 0.0x below |
| P/E Ratio | 7.7x | N/A | - |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: 9.7% (Adequate - Top 50% of sector (median: 8.0%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 22.0% (Excellent - Top 5% of sector (median: 5.4%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 54.4% (Excellent - Top 25% of sector (median: 33.4%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 73.4% (Adequate)
P/E Ratio (Price-to-Earnings)
Stock price divided by earnings per share. Lower P/E may indicate undervaluation, while higher P/E suggests growth expectations.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 15x | Attractively valued, potential opportunity |
| Good | 15x - 25x | Fair value for quality company |
| Adequate | 25x - 35x | Growth premium, justify with earnings growth |
| Warning | 35x - 50x | High expectations priced in |
| Red flag | > 50x or negative | Speculative valuation or losses |
Current: 768.0% (Adequate)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 33.4% (Excellent)
Frequently Asked Questions
Q: What is Flowco Holdings Inc.'s Return on Invested Capital (ROIC)?
Flowco Holdings Inc. (FLOC) has a trailing twelve-month Return on Invested Capital (ROIC) of 9.7%. This compares above the sector median of 8.0%. An ROIC near 8-12% is approximately the cost of capital for most companies.
Q: What is Flowco Holdings Inc.'s Free Cash Flow Margin?
Flowco Holdings Inc. (FLOC) has a free cash flow margin of 22.0%, generating $167.1 million in free cash flow over the trailing twelve months. A FCF margin above 20% indicates excellent cash conversion and a high-quality business model.
Q: Is Flowco Holdings Inc. stock overvalued or undervalued?
Flowco Holdings Inc. (FLOC) trades at a P/E ratio of 7.7x, which is above the sector median of N/A. The EV/Sales multiple is 1.0x. Free cash flow yield is 33.4%, which represents an attractive cash return to investors.
Q: How much debt does Flowco Holdings Inc. have?
Flowco Holdings Inc. (FLOC) has a debt-to-equity ratio of 0.7x with total debt of $167.8 million. Net debt position is $163.3 million.
Q: What is Flowco Holdings Inc.'s revenue and earnings growth?
Flowco Holdings Inc. (FLOC) grew revenue by 41.9% year-over-year. Net income declined by 99.9% year-over-year. Double-digit revenue growth indicates strong demand and market share gains.
Q: Is Flowco Holdings Inc. buying back stock?
Flowco Holdings Inc. (FLOC) repurchased $15.0 million of stock over the trailing twelve months. This represents a buyback yield of 3.0%.
Q: How does Flowco Holdings Inc. compare to competitors in Industrials?
Compared to other companies in Industrials, Flowco Holdings Inc. (FLOC) shows: ROIC of 9.7% is above the sector median of 8.0% (Top 44%). FCF margin of 22.0% exceeds the sector median of 5.4% (Top 0% of sector). Gross margin at 54.4% is 21 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with Flowco Holdings Inc.?
Investors in Flowco Holdings Inc. (FLOC) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-05. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.