EPS of $-0.18 increased by 67.9% from previous year
Gross margin of 33.5%
Net income of -398.00K
"N/A" - N/A
The InterGroup Corporation (INTG) QQ1 2025 Results Analysis: Revenue Acceleration Amid Elevated Financing Costs in Travel Lodging
Executive Summary
The InterGroup Corporation delivered a solid sequential rebound in QQ1 2025, with revenue of $16.906 million, up 25.92% QoQ and 9.00% YoY to support an operating income of $3.129 million and EBITDA of $5.013 million. Despite these improvements, net income remained negative at $0.398 million, pressured by elevated interest expense ($3.838 million) and other non-operating charges totaling approximately $3.622 million. The quarter marked meaningful margin expansion, as gross margin reached ~33.5% and operating margin stood at ~18.5%, underscoring better operating performance even as financing costs weighed on bottom-line profitability.
From a balance sheet perspective, INTG remains highly leveraged with total debt of $190.841 million and negative stockholders’ equity of $80.897 million, resulting in a debt-to-capitalization figure of roughly 1.74x and a current ratio of 0.92x. Cash flow from operations was positive at $3.36 million, supporting modest free cash flow of $3.36 million for the period, yet liquidity remains constrained by the near-term debt burden and the lack of equity upside. Positive operating cash flow and improving top-line momentum suggest a potential path to profitability if financing costs can be stabilized (e.g., via refinancing, debt restructuring, or asset monetization) and if revenue growth persists.
Overall investment thesis: The QQ1 2025 results reflect a transitional period where revenue growth and margin expansion are encouraging, but the investment case hinges on reducing financing costs and deleveraging the balance sheet. If management can secure favorable refinancing terms or monetize non-core assets while sustaining the current revenue trajectory, INTG could move toward a more robust profitability profile. The stock remains a high-risk, high-uncertainty play given negative equity and outsized long-term liabilities in a cyclical Travel Lodging environment.
Key Performance Indicators
Revenue
16.91M
QoQ: 25.92% | YoY:9.00%
Gross Profit
5.66M
33.46% margin
QoQ: 79.59% | YoY:46.06%
Operating Income
3.13M
QoQ: 532.12% | YoY:96.05%
Net Income
-398.00K
QoQ: 89.69% | YoY:68.01%
EPS
-0.18
QoQ: 89.83% | YoY:67.86%
Revenue Trend
Margin Analysis
Key Insights
Total Assets: $109.327 million
Total Liabilities: $216.806 million; Total Stockholders’ Equity: -$80.897 million
Long-Term Debt: $190.841 million; Net Debt: $185.249 million
Current Ratio: 0.919; Quick Ratio: 0.919; Cash Ratio: 0.288
Negative equity with a debt-heavy capital structure; P/B and P/BV implications are negative due to equity position.
Capital Allocation & Valuation:
Financial Highlights
Revenue: $16.906 million (YoY +9.0%; QoQ +25.92%)
Gross Profit: $5.657 million; Gross Margin: 33.46%
Operating Income: $3.129 million; Operating Margin: 18.51%
EBITDA: $5.013 million; EBITDA Margin: 29.65%
Net Income: -$0.398 million; Net Margin: -2.35%
EPS: -$0.18; Diluted EPS: -$0.18; Weighted Avg Shares Outstanding: 2.173 million
Interest Expense: $3.838 million; Depreciation & Amortization: $1.668 million
Income Before Tax: -$0.493 million; Tax Expense: $0.359 million; Effective Tax Rate: Not meaningful (loss base)
Cash Flow: Net cash provided by operating activities $3.36 million; Free Cash Flow $3.36 million; Cash at end of period $10.218 million; Cash & Short-Term Investments: $13.201 million
Balance Sheet:
- Total Assets: $109.327 million
- Total Liabilities: $216.806 million; Total Stockholders’ Equity: -$80.897 million
- Long-Term Debt: $190.841 million; Net Debt: $185.249 million
- Current Ratio: 0.919; Quick Ratio: 0.919; Cash Ratio: 0.288
- Negative equity with a debt-heavy capital structure; P/B and P/BV implications are negative due to equity position.
Capital Allocation & Valuation:
- Price-to-Sales: ~1.99x; Price-to-Book: negative (implied by negative equity);
- Enterprise Value Multiple: ~43.65x; Indicators suggest high risk given leverage and profitability profile.
- Dividend Payout: 0; Free Cash Flow generation supports debt service but is not yet a driver of shareholder returns.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
16.91M
9.00%
25.92%
Gross Profit
5.66M
46.06%
79.59%
Operating Income
3.13M
96.05%
532.12%
Net Income
-398.00K
68.01%
89.69%
EPS
-0.18
67.86%
89.83%
Key Financial Ratios
currentRatio
0.92
grossProfitMargin
33.5%
operatingProfitMargin
18.5%
netProfitMargin
-2.35%
returnOnAssets
-0.36%
returnOnEquity
0.49%
debtEquityRatio
-2.36
operatingCashFlowPerShare
$1.55
freeCashFlowPerShare
$1.55
priceToBookRatio
-0.42
priceEarningsRatio
-21.08
Net Income vs. Revenue
Expense Breakdown
Management Commentary
No earnings-call transcript data provided for QQ1 2025. As a result, management quotes and thematic quotes could not be extracted. If you can supply the transcript or a link, I will extract and group quotes by themes (strategy, operations, market conditions) with context and significance.
N/A
— N/A
N/A
— N/A
Forward Guidance
No formal forward guidance was provided in the supplied data. Given the operating improvements in QQ1 2025, the key factors to watch for forward guidance include (i) refinancing opportunities to reduce interest expense and accrued financing costs, (ii) traction on monetization of non-core assets or capital recycling to strengthen equity and liquidity, (iii) sustained top-line growth in the lodging and real estate segments, and (iv) operational efficiency gains in hotel operations. Our assessment: if management can secure favorable refinancing terms and maintain the current revenue trajectory, INTG’s path toward profitability could improve materially over the next several quarters. Key indicators investors should monitor: new debt refinancing announcements, asset sales or monetizations, occupancy and average daily rate (ADR) trends for the Hilton SF property (and related assets), and any amendments to debt covenants that could affect liquidity.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
INTG Focus
33.46%
18.50%
0.49%
-21.08%
HTHT
32.50%
19.00%
5.37%
33.67%
ATAT
40.20%
22.10%
11.00%
17.96%
LUXH
-15.80%
-32.80%
1.34%
-71.84%
IHG
0.00%
0.00%
0.00%
0.00%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
INTG presents a high-risk/high-uncertainty investment opportunity. The QQ1 2025 results demonstrate a meaningful top-line acceleration and margin expansion, but profitability remains constrained by financing costs and a structurally levered balance sheet. The primary value realization would come from (1) deleveraging through refinancing or asset monetization, (2) stabilizing cash flow through improved occupancy/ADR and cost management, and (3) potential portfolio optimization to unlock additional value. If management can reduce interest expense and restore positive equity, the stock could re-rate on improving risk-adjusted returns. Until then, investors should weigh the near-term profitability risk against the potential for leverage-driven upside and asset monetization catalysts.
Key Investment Factors
Growth Potential
"Moderate growth runway rooted in the recovery of travel demand and the potential monetization of real estate/investment assets. Potential catalysts include refinancing of high-cost debt, strategic asset sales, and diversification of revenue streams within the Hotel Operations, Real Estate Operations, and Investment Transactions segments. If leverage is reduced and the hotel/real estate portfolio is optimized, margins could improve further and support higher free cash flow generation."
Profitability Risk
"High leverage and negative stockholders' equity create balance-sheet risk and potential dilution. Dependence on refinancing markets exposes INTG to interest-rate volatility. Limited scale relative to peers and a reliance on a single flagship hotel asset (Hilton San Francisco Financial District) increases earnings volatility from occupancy/ADR fluctuations. Regulatory, macroeconomic, and travel demand cycles could adversely affect cash flow and debt covenants."
Financial Position
"Near-term liquidity constraints given current ratio below 1x and substantial long-term debt. Positive operating cash flow and modest free cash flow are encouraging, but the company remains highly indebted with negative equity. Strengthening equity via refinancing or asset monetization would materially shift the risk profile.
SWOT Analysis
Strengths
Revenue growth in QQ1 2025 driven by improved top-line performance (YoY +9.0%; QoQ +25.92%)
Healthy gross margin (~33.5%) and expanding operating margin (~18.5%) indicating better cost control and mix
Positive operating cash flow generation ($3.36M) and free cash flow support ongoing liquidity
Weaknesses
Negative stockholders' equity (-$80.897M) and very high long-term debt ($190.841M)
Current ratio below 1.0 (0.919) signaling liquidity constraints
Net income negative (-$0.398M) due to elevated other expenses ($-3.622M) and high interest expense ($3.838M)
Opportunities
Debt refinancing or asset monetization could reduce financing cost and improve profitability
Operational leverage from its hotel and multifaceted asset base could drive higher margins if occupancy/ADR improves
Strategic portfolio optimization across Hotel Operations, Real Estate Operations, and Investment Transactions
Threats
Cyclicality of Travel Lodging sector and sensitivity to macroeconomic shocks
Refinancing risk given large debt load and possible rising interest rates
Competitive pressure and occupancy volatility impacting margins and cash flows