Kestra Medical Technologies, Lt — Earnings Quality Grade F
KMTS · Healthcare
Major red flags
Screening Summary
Management Signals
Financial Trends
Revenue & Net Income ($B)
Margins (%)
18-Point Screening
Revenue Quality
DSO surged by 23 days (26 → 49)
Small-cap context: DSO swings on a small revenue base are more often quarterly customer-mix effects than red flags.
AR growth 304.5% exceeds revenue growth 115.1%
Revenue grew 115.1% but CFFO declined -7.4%
Small-cap context: Small-cap revenue/CFFO ratio is sensitive to growth-stage working-capital draws.
Expense Quality
Inventory growth 99.8% far exceeds COGS 29.7%, margin rising. Fraud signal
Small-cap context: Inventory ratios on a small base are noisy; a single product launch can move them sharply.
CapEx growth 88.5% vs revenue 115.1%. Normal
SG&A/Gross Profit = 474.7%, exceeds 70%
Gross margin swung +39.2pp (1.3% → 40.5%)
Cash Flow Quality
CFFO < Net Income for 3 consecutive years
Small-cap context: Small-cap CFFO/NI often diverges from working-capital swings, not necessarily manipulation.
FCF is negative ($-0.1B)
Accruals ratio = -12.2%. Low accruals
Cash $0.2B covers debt $0.0B
Balance Sheet Health
No goodwill. Clean balance sheet
Interest coverage = -13.8x (<2x). Financial stress
Other assets 58.0% vs revenue 115.1%. Normal
No write-off data
Acquisition Risk
FCF after acquisitions negative for 3 years
Small-cap context: A single acquisition on a small balance sheet can trip serial-acquirer logic.
No goodwill
Manipulation Score
M-Score = -1.66 (> -1.78). LIKELY MANIPULATOR
Small-cap context: Beneish M-Score was calibrated on large-caps; small-cap DSO/inventory volatility mechanically inflates it.
Beneish M-Score
Altman Z-Score
Generated from public financial data using forensic accounting frameworks. Not investment advice. Data: Yahoo Finance · 2026-04-25