Cadre Holds a Clean Slate — Yet Silence Can Echo

Zero risk alerts signal strong fundamentals, but investors should stay vigilant for hidden headwinds

CDRE Cadre Holdings, Inc.

In this report

01

Profitability & Margins

Gross, operating, net, EBITDA margin trends and alerts

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02

Leverage & Solvency

Debt-to-equity, interest coverage, net debt/EBITDA

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03

Cash Flow & Liquidity

Operating/free cash flow, current/quick/cash ratios

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04

Earnings Quality

Income quality, accruals, SBC, capital intensity

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05

Risk Summary

Alert dashboard, watchlist, investment implications

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Profitability & Margin Erosion

Cadre Holdings, Inc. (CDRE) — Margin Risk

Cadre Holdings, Inc. (CDRE) exhibits a robust profitability profile across all margin measures. Gross margin sits at 41.2%, comfortably above its ten‑year average of 39.3% and positioned in the 95th percentile of historical performance, indicating strong pricing power or cost efficiency that has remained stable year‑over‑year (+0.1%). Operating margin has improved to 12.3%, surpassing the decade average of 10.0% and ranking at the top (100th percentile), with a notable three‑year gain of 8.6 percentage points, reflecting effective expense management as the business scales. Net margin is also healthy at 7.2%, well above its ten‑year mean of 5.0% and residing in the 77th percentile, showing consistent bottom‑line growth (+0.9% YoY). Collectively, these metrics suggest a durable earnings engine with no immediate signs of erosion.

Potential exposure to macroeconomic slowdowns that could pressure pricing power and compress gross margins.
Rising interest rates may increase financing costs, potentially eroding net margin if not offset by operating efficiency gains.

Gross margin at 41.2% is in the 95th percentile of its ten‑year range, indicating strong cost control.
Operating margin improvement to 12.3% places the company at the top of its historical distribution (100th percentile).
Net margin growth of 6.0% over three years demonstrates consistent bottom‑line expansion.

CDRE clear

The company’s margin trajectory is uniformly positive and outperforms its historical benchmarks. Gross margin stability (+0.1% YoY) signals that cost structures are resilient to short‑term market fluctuations, while the upward swing in operating margin (+0.5% YoY, +8.6% over three years) points to successful scaling of operational efficiencies. Net margin growth further confirms that these improvements translate into higher profitability after taxes and interest. There is no evidence of multi‑year decline or cyclical dip; instead, margins are trending upward or remaining flat at elevated levels.

Profitability & Margin Erosion

Cadre Holdings, Inc. (CDRE) — Margin Trends

Leverage & Solvency

Cadre Holdings, Inc. (CDRE) — Leverage Risk

The analysis of Cadre Holdings, Inc. (CDRE) reveals a leverage profile that is modestly elevated but still within historically acceptable bounds. The company's Debt-to-Equity ratio has risen to 1.01x, placing it in the 31st percentile of its ten‑year distribution and marking a year‑over‑year increase of 0.25 points, indicating a deteriorating trend. Net Debt to EBITDA stands at 2.1x, also below the long‑run average of 2.9x but climbing by 0.7x YoY, which pushes it into the 24th percentile and signals further erosion of debt capacity. While neither metric has breached conventional danger thresholds—often cited as >2.0x for Debt-to-Equity or >3.0x for Net Debt/EBITDA—the upward trajectory warrants close monitoring, especially given the lack of disclosed interest coverage data that could otherwise clarify cash‑flow resilience.

Continuing deterioration in Debt-to-Equity and Net Debt/EBITDA ratios may push the company toward higher‑cost financing.
Lack of disclosed interest coverage trends hampers evaluation of cash‑flow adequacy to meet debt obligations.

Both leverage metrics remain below historically defined danger thresholds, providing a margin of safety despite recent upward movement.

CDRE watch

Cadre Holdings' current Debt-to-Equity ratio of 1.01x remains below the typical warning line of 2.0x, yet its upward trend and position in the lower third of its historical range suggest growing reliance on balance‑sheet financing. Net Debt/EBITDA at 2.1x is still under the 3.0x safety threshold but has accelerated sharply, rising 0.7x YoY, which could compress financial flexibility if earnings do not keep pace. The absence of explicit interest coverage figures limits a full assessment of debt service capacity; however, the observed leverage creep implies that any decline in operating performance would quickly erode coverage buffers.

Cash Flow & Liquidity

Cadre Holdings, Inc. (CDRE) — Cash Flow Risk

Cadre Holdings, Inc. demonstrates robust cash generation with operating cash flow of $0.1 billion and free cash flow of $0.1 billion in the most recent period, both markedly above its 10‑year averages of essentially zero. The YoY increase of $31.9 million in operating cash flow and $30.7 million in free cash flow underscores that the business is converting earnings into cash at a healthy pace, reducing reliance on external financing. Liquidity metrics are solid: the current ratio stands at 3.50× (well above the 2.62× ten‑year average) and the quick ratio at 2.54×, indicating ample short‑term assets to cover liabilities even under stress, while the cash ratio of 1.18× confirms that cash alone exceeds current obligations.

Potential for future capital intensity that could erode free cash flow if investment needs rise
Reliance on stable operating performance; any downturn could quickly affect thin margin between operating and free cash flow

Operating and free cash flow both exceed historical averages by a wide margin
Liquidity ratios are comfortably above typical safety thresholds (current >2.0×, quick >1.5×, cash >1.0×)

CDRE clear

Operating cash flow is positive and growing, matching free cash flow levels, which signals that capital expenditures are modest relative to earnings and that the firm retains most of its generated cash. The stability of both metrics over a decade suggests consistent cash conversion efficiency rather than one‑off spikes. Short‑term liquidity is strong; the current ratio’s upward trend to 3.50× and a quick ratio above 2.0× provide a wide cushion against any near‑term covenant breaches or unexpected outflows.

Earnings Quality

Cadre Holdings, Inc. (CDRE) — Earnings Quality Risk

Cadre Holdings exhibits solid earnings quality, as operating cash flow (OCF) comfortably exceeds net income with an OCF/NI ratio of 1.44x, albeit modestly below its 10‑year average of 1.81x. This suggests that the majority of reported profit is backed by cash generation, reducing the risk of earnings manipulation. Accruals are slightly negative at -2.5%, indicating a small proportion of income recognized before cash is received; the figure is less aggressive than the historical average of -4.9% and has remained stable year‑over‑year.

OCF/NI ratio below long‑term average could signal slower cash conversion if trends reverse
SBC expense slightly above historical norm may pressure margins if compensation scales with growth
Any future increase in CapEx relative to OCF would tighten free cash flow

Operating cash flow exceeds net income, confirming earnings quality
Accrual ratio is improving and remains less negative than the 10‑year average
Capital intensity is low, leaving discretionary cash for strategic initiatives

CDRE clear

The company’s cash conversion remains healthy, with OCF surpassing net income by 44%, signaling that earnings are largely supported by real cash flows. Accrual intensity is low and improving, as the current accrual ratio of -0.025 is tighter than the decade‑long mean, implying limited earnings divergence from cash. Stock‑based compensation (SBC) accounts for 2.0% of revenue, marginally above its 10‑year average of 1.8%, but still a modest expense that should not materially erode profitability. Capital expenditures are restrained at 11% of OCF, well under the historical 15% level, indicating low capital intensity and ample cash left for other uses.

Risk Summary & Watchlist

Cadre Holdings, Inc. (CDRE) — Risk Dashboard

The risk assessment across the reviewed universe reveals an overall benign risk environment, with Cadre Holdings, Inc. (CDRE) showing no material alerts in any of the evaluated dimensions—margins, leverage, cash flow, or quality. The absence of critical or warning signals indicates that the company currently operates within comfortable safety thresholds and does not exhibit any emerging financial stressors. Consequently, there are no compounding risk factors such as margin erosion combined with rising leverage to flag for immediate concern. While the profile is clean today, standard monitoring practices remain advisable to ensure early detection of any future deviations.

Risk Rankings

CDRE clear

No alerts detected; financial metrics are within acceptable ranges.

Key Concern: None identified at this time

Cross-Cutting Themes

Overall risk landscape is clean with no common stress signals across the group.

Watchlist

Continue to monitor Cadre Holdings' quarterly earnings for any emerging margin or leverage trends.
Track industry-wide credit conditions as a backdrop to ensure external factors do not introduce new risks.

INVESTMENT IMPLICATIONS

Given the clean risk profile, investors can approach Cadre Holdings with a neutral stance regarding financial health concerns. The lack of red flags suggests that capital allocation decisions should be driven more by growth prospects, valuation considerations, and strategic positioning rather than defensive risk mitigation. However, prudent investors should still incorporate routine surveillance of key performance indicators—particularly gross margin trends and debt metrics—to capture any early signs of deterioration. In the near term (6‑12 months), the primary focus for investment decisions will be on the company's operational execution and market dynamics rather than financial distress signals. Should macroeconomic conditions shift or sector-specific pressures emerge, a re‑evaluation of the risk landscape would be warranted to adjust exposure accordingly.

Key Takeaways

1. Cadre Holdings shows no current financial alerts across all major risk categories.
2. The overall risk environment for the reviewed set is clean, with no compounding concerns identified.
3. Standard quarterly monitoring of margins and leverage remains advisable to maintain early warning capability.
4. Investment decisions should prioritize growth and valuation metrics over defensive risk considerations at this time.

CDRE

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Report written 2026-07-31 • Finexus

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.