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    Is TrueBlue (NYSE:TBI) A Risky Investment?

    Simply Wall St·09/17/2025 10:28:26
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    Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. We can see that TrueBlue, Inc. (NYSE:TBI) does use debt in its business. But the real question is whether this debt is making the company risky.

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    What Risk Does Debt Bring?

    Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

    What Is TrueBlue's Debt?

    You can click the graphic below for the historical numbers, but it shows that as of June 2025 TrueBlue had US$53.8m of debt, an increase on none, over one year. However, it also had US$21.9m in cash, and so its net debt is US$31.9m.

    debt-equity-history-analysis
    NYSE:TBI Debt to Equity History September 17th 2025

    A Look At TrueBlue's Liabilities

    We can see from the most recent balance sheet that TrueBlue had liabilities of US$148.1m falling due within a year, and liabilities of US$219.5m due beyond that. Offsetting these obligations, it had cash of US$21.9m as well as receivables valued at US$230.1m due within 12 months. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$115.6m.

    This is a mountain of leverage relative to its market capitalization of US$184.5m. This suggests shareholders would be heavily diluted if the company needed to shore up its balance sheet in a hurry. When analysing debt levels, the balance sheet is the obvious place to start. But it is future earnings, more than anything, that will determine TrueBlue's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.

    View our latest analysis for TrueBlue

    Over 12 months, TrueBlue made a loss at the EBIT level, and saw its revenue drop to US$1.5b, which is a fall of 13%. That's not what we would hope to see.

    Caveat Emptor

    While TrueBlue's falling revenue is about as heartwarming as a wet blanket, arguably its earnings before interest and tax (EBIT) loss is even less appealing. Its EBIT loss was a whopping US$42m. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. However, it doesn't help that it burned through US$55m of cash over the last year. So in short it's a really risky stock. For riskier companies like TrueBlue I always like to keep an eye on whether insiders are buying or selling. So click here if you want to find out for yourself.

    If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.