Is BARK (NYSE:BARK) Weighed On By Its Debt Load?
Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of permanent loss is the risk I worry about... and every practical investor I know worries about.' 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 BARK, Inc. (NYSE:BARK) does use debt in its business. But is this debt a concern to shareholders?
Why Does Debt Bring Risk?
Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. Part and parcel of capitalism is the process of 'creative destruction' where failed businesses are mercilessly liquidated by their bankers. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.
How Much Debt Does BARK Carry?
As you can see below, at the end of September 2025, BARK had US$42.8m of debt, up from US$40.1m a year ago. Click the image for more detail. But on the other hand it also has US$63.4m in cash, leading to a US$20.6m net cash position.
How Healthy Is BARK's Balance Sheet?
We can see from the most recent balance sheet that BARK had liabilities of US$127.3m falling due within a year, and liabilities of US$34.2m due beyond that. Offsetting these obligations, it had cash of US$63.4m as well as receivables valued at US$16.9m due within 12 months. So its liabilities total US$81.2m more than the combination of its cash and short-term receivables.
This is a mountain of leverage relative to its market capitalization of US$95.3m. Should its lenders demand that it shore up the balance sheet, shareholders would likely face severe dilution. Despite its noteworthy liabilities, BARK boasts net cash, so it's fair to say it does not have a heavy debt load! The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine BARK'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.
Check out our latest analysis for BARK
In the last year BARK had a loss before interest and tax, and actually shrunk its revenue by 7.6%, to US$452m. We would much prefer see growth.
So How Risky Is BARK?
Statistically speaking companies that lose money are riskier than those that make money. And the fact is that over the last twelve months BARK lost money at the earnings before interest and tax (EBIT) line. And over the same period it saw negative free cash outflow of US$40m and booked a US$35m accounting loss. However, it has net cash of US$20.6m, so it has a bit of time before it will need more capital. Overall, we'd say the stock is a bit risky, and we're usually very cautious until we see positive free cash flow. When analysing debt levels, the balance sheet is the obvious place to start. But ultimately, every company can contain risks that exist outside of the balance sheet. To that end, you should be aware of the 3 warning signs we've spotted with BARK .
When all is said and done, sometimes its easier to focus on companies that don't even need debt. Readers can access a list of growth stocks with zero net debt 100% free, right now.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.