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Is Mannatech Incorporated’s (NASDAQ:MTEX) Balance Sheet Strong Enough To Weather A Storm?

Collin Greene

Investors are always looking for growth in small-cap stocks like Mannatech Incorporated (NASDAQ:MTEX), with a market cap of US$43.37M. However, an important fact which most ignore is: how financially healthy is the business? Given that MTEX is not presently profitable, it’s vital to understand the current state of its operations and pathway to profitability. I believe these basic checks tell most of the story you need to know. Nevertheless, this commentary is still very high-level, so I recommend you dig deeper yourself into MTEX here.

Does MTEX generate enough cash through operations?

Over the past year, MTEX has reduced its debt from US$1.99M to US$1.19M , which comprises of short- and long-term debt. With this reduction in debt, MTEX’s cash and short-term investments stands at US$37.68M , ready to deploy into the business. Moreover, MTEX has produced US$10.00M in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 842.29%, meaning that MTEX’s debt is appropriately covered by operating cash. This ratio can also be interpreted as a measure of efficiency for loss making businesses as traditional metrics such as return on asset (ROA) requires a positive net income. In MTEX’s case, it is able to generate 8.42x cash from its debt capital.

Can MTEX meet its short-term obligations with the cash in hand?

With current liabilities at US$33.45M, it appears that the company has been able to meet these commitments with a current assets level of US$56.25M, leading to a 1.68x current account ratio. Usually, for Personal Products companies, this is a suitable ratio since there’s sufficient cash cushion without leaving too much capital idle or in low-earning investments.

NasdaqGS:MTEX Historical Debt May 11th 18

Does MTEX face the risk of succumbing to its debt-load?

With a debt-to-equity ratio of 2.97%, MTEX’s debt level is relatively low. MTEX is not taking on too much debt commitment, which may be constraining for future growth. Investors’ risk associated with debt is virtually non-existent with MTEX, and the company has plenty of headroom and ability to raise debt should it need to in the future.

Next Steps:

MTEX’s high cash coverage and low debt levels indicate its ability to utilise its borrowings efficiently in order to generate ample cash flow. Furthermore, the company will be able to pay all of its upcoming liabilities from its current short-term assets. I admit this is a fairly basic analysis for MTEX’s financial health. Other important fundamentals need to be considered alongside. You should continue to research Mannatech to get a better picture of the stock by looking at:

  1. Valuation: What is MTEX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MTEX is currently mispriced by the market.
  2. Historical Performance: What has MTEX’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.