SNDA

Sonida is growing the top line fast (FY2025 revenue $381M, +25.2%) but the quality beneath that growth is poor. The company has lost money every year since FY2022, and FY2025 net loss widened to -$70.8M (diluted EPS -$4.22) from -$2.06M the prior year. The 10-K reconciliation shows the loss is driven by D&A of $56.8M, $12.5M of long-lived asset impairment, $16.2M of transaction/restructuring costs and $38.6M of interest expense — and was only cushioned by a one-time $48.5M gain on extinguishment of debt. Strip the gain out and core operations are deeply unprofitable on a GAAP basis. Operating cash flow did turn positive at $24.4M, but that is swamped by $33.3M of capex, so the business does not self-fund its real-estate reinvestment.

The balance sheet is the central problem. Stockholders' equity has been reduced to essentially zero (-$11.0K) against $789M of liabilities and an accumulated deficit of -$491M; long-term debt is $682M and cash is just $11M, down 35%. Working capital is negative ($77.9M current assets vs $105M current liabilities). Shares outstanding jumped +150.5% to 47.4M, so existing holders have been heavily diluted. This is a thinly-capitalized, highly-levered operator with no equity cushion to absorb a downturn.