WEBULL

Is Tribe Property Technologies (CVE:TRBE) Using Too Much Debt?

Simply Wall St · 12/30/2025 10:24

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, Tribe Property Technologies Inc. (CVE:TRBE) does carry debt. But is this debt a concern to shareholders?

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What Risk Does Debt Bring?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. 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, 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 Tribe Property Technologies's Net Debt?

The image below, which you can click on for greater detail, shows that Tribe Property Technologies had debt of CA$11.9m at the end of September 2025, a reduction from CA$14.8m over a year. On the flip side, it has CA$3.27m in cash leading to net debt of about CA$8.65m.

debt-equity-history-analysis
TSXV:TRBE Debt to Equity History December 30th 2025

A Look At Tribe Property Technologies' Liabilities

We can see from the most recent balance sheet that Tribe Property Technologies had liabilities of CA$17.3m falling due within a year, and liabilities of CA$4.36m due beyond that. Offsetting this, it had CA$3.27m in cash and CA$2.24m in receivables that were due within 12 months. So it has liabilities totalling CA$16.2m more than its cash and near-term receivables, combined.

Given this deficit is actually higher than the company's market capitalization of CA$14.0m, we think shareholders really should watch Tribe Property Technologies's debt levels, like a parent watching their child ride a bike for the first time. Hypothetically, extremely heavy dilution would be required if the company were forced to pay down its liabilities by raising capital at the current share price. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately the future profitability of the business will decide if Tribe Property Technologies can strengthen its balance sheet over time. So if you want to see what the professionals think, you might find this free report on analyst profit forecasts to be interesting.

See our latest analysis for Tribe Property Technologies

Over 12 months, Tribe Property Technologies reported revenue of CA$33m, which is a gain of 32%, although it did not report any earnings before interest and tax. Shareholders probably have their fingers crossed that it can grow its way to profits.

Caveat Emptor

While we can certainly appreciate Tribe Property Technologies's revenue growth, its earnings before interest and tax (EBIT) loss is not ideal. Indeed, it lost a very considerable CA$2.7m at the EBIT level. When we look at that alongside the significant liabilities, we're not particularly confident about the company. It would need to improve its operations quickly for us to be interested in it. Not least because it burned through CA$1.1m in negative free cash flow over the last year. That means it's on the risky side of things. There's no doubt that we learn most about debt from the balance sheet. However, not all investment risk resides within the balance sheet - far from it. For example, we've discovered 3 warning signs for Tribe Property Technologies (2 are significant!) that you should be aware of before investing here.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.