Intrinsic value of Lombard Medical - EVAR

Previous Close

$0.45

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-50%

Previous close

$0.45

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-50%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of EVAR stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -20.00
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  12
  12
  13
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
  38
  39
Variable operating expenses, $m
 
  44
  45
  46
  47
  49
  50
  52
  54
  55
  58
  58
  61
  63
  66
  69
  72
  75
  78
  82
  85
  89
  94
  98
  103
  108
  113
  118
  124
  130
  136
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  41
  44
  45
  46
  47
  49
  50
  52
  54
  55
  58
  58
  61
  63
  66
  69
  72
  75
  78
  82
  85
  89
  94
  98
  103
  108
  113
  118
  124
  130
  136
Operating income, $m
  -29
  -32
  -32
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -76
  -80
  -84
  -88
  -92
  -97
EBITDA, $m
  -27
  -29
  -30
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -93
Interest expense (income), $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
Earnings before tax, $m
  -33
  -33
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -43
  -44
  -46
  -48
  -50
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -92
  -96
  -101
Tax expense, $m
  -2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -31
  -33
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -43
  -44
  -46
  -48
  -50
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -92
  -96
  -101

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  21
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  68
  48
  49
  50
  52
  53
  55
  57
  59
  61
  64
  66
  69
  72
  75
  78
  81
  85
  89
  93
  97
  101
  106
  111
  116
  122
  128
  134
  140
  147
  154
Adjusted assets (=assets-cash), $m
  47
  48
  49
  50
  52
  53
  55
  57
  59
  61
  64
  66
  69
  72
  75
  78
  81
  85
  89
  93
  97
  101
  106
  111
  116
  122
  128
  134
  140
  147
  154
Revenue / Adjusted assets
  0.255
  0.250
  0.265
  0.260
  0.250
  0.264
  0.255
  0.263
  0.254
  0.262
  0.250
  0.258
  0.261
  0.250
  0.253
  0.256
  0.259
  0.259
  0.258
  0.258
  0.258
  0.257
  0.255
  0.252
  0.259
  0.254
  0.258
  0.254
  0.257
  0.259
  0.253
Average production assets, $m
  20
  20
  21
  21
  22
  23
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  35
  36
  38
  39
  41
  43
  45
  47
  49
  52
  54
  57
  60
  63
  66
Working capital, $m
  24
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
Total debt, $m
  32
  21
  22
  23
  25
  26
  28
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  58
  61
  65
  69
  74
  78
  83
  88
  93
  99
  104
  110
  117
Total liabilities, $m
  54
  43
  44
  45
  47
  48
  50
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  76
  80
  83
  87
  91
  96
  100
  105
  110
  115
  121
  126
  132
  139
Total equity, $m
  14
  5
  5
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
Total liabilities and equity, $m
  68
  48
  49
  50
  52
  53
  56
  57
  59
  61
  63
  66
  69
  71
  74
  78
  81
  84
  89
  92
  97
  101
  107
  111
  117
  122
  128
  134
  140
  147
  154
Debt-to-equity ratio
  2.286
  4.420
  4.520
  4.630
  4.750
  4.880
  5.010
  5.140
  5.270
  5.400
  5.540
  5.670
  5.800
  5.930
  6.050
  6.170
  6.290
  6.410
  6.520
  6.630
  6.730
  6.830
  6.930
  7.020
  7.110
  7.200
  7.280
  7.360
  7.430
  7.510
  7.570
Adjusted equity ratio
  -0.149
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -31
  -33
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -43
  -44
  -46
  -48
  -50
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -92
  -96
  -101
Depreciation, amort., depletion, $m
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
Funds from operations, $m
  -28
  -30
  -30
  -31
  -32
  -33
  -34
  -35
  -37
  -38
  -39
  -41
  -43
  -45
  -46
  -49
  -51
  -53
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -93
  -97
Change in working capital, $m
  -3
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  -25
  -30
  -31
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -93
  -98
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
New CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
Cash from investing activities, $m
  0
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
Free cash flow, $m
  -25
  -32
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -60
  -62
  -65
  -68
  -72
  -75
  -79
  -82
  -86
  -91
  -95
  -100
  -105
Issuance/(repayment) of debt, $m
  12
  -7
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
Issuance/(repurchase) of shares, $m
  5
  40
  33
  34
  35
  36
  37
  38
  40
  41
  43
  43
  45
  47
  49
  51
  53
  55
  58
  61
  63
  66
  70
  73
  76
  80
  84
  88
  92
  97
  101
Cash from financing (excl. dividends), $m  
  16
  33
  34
  35
  36
  37
  39
  40
  42
  43
  45
  45
  47
  50
  52
  54
  56
  58
  61
  65
  67
  70
  74
  77
  81
  85
  89
  94
  98
  103
  107
Total cash flow (excl. dividends), $m
  -12
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Retained Cash Flow (-), $m
  29
  -40
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -61
  -63
  -66
  -70
  -73
  -76
  -80
  -84
  -88
  -92
  -97
  -101
Prev. year cash balance distribution, $m
 
  17
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -21
  -31
  -32
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -74
  -77
  -81
  -85
  -89
  -94
  -98
Discount rate, %
 
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
 
  -20
  -27
  -25
  -23
  -22
  -20
  -18
  -17
  -15
  -13
  -12
  -10
  -9
  -7
  -6
  -5
  -4
  -3
  -3
  -2
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  5.8
  0.7
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Lombard Medical, Inc. is a medical technology company. The Company specializes in developing, manufacturing, and marketing endovascular stent-grafts that address medical needs in the repair of aortic aneurysms. The Company's Aorfix is an abdominal aortic aneurysm (AAA) stent-graft for the treatment of AAAs with angulation at the neck of the aneurysm of over 90 degrees. The Company supplies Aorfix pre-loaded into a delivery system, Aorflex, which is designed for accurate placement of Aorfix in the abdominal aorta. Once Aorfix is properly placed within the abdominal aorta, it provides a conduit for blood flow, thereby relieving pressure within the weakened or aneurysmal section of the vessel wall, which reduces the potential for the AAA to rupture. It also offers IntelliFlex, which is a delivery system technology created for Aorfix AAA stent graft, and Altura Endovascular Stent Graft System that offers a simple and predictable solution to the treatment of standard AAA anatomies.

FINANCIAL RATIOS  of  Lombard Medical (EVAR)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 1
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow -0.5
Price to Free Cash Flow -0.5
Growth Rates
Sales Growth Rate -20%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 200%
Total Debt to Equity 228.6%
Interest Coverage -32
Management Effectiveness
Return On Assets -39%
Ret/ On Assets - 3 Yr. Avg. -46.4%
Return On Total Capital -55.4%
Ret/ On T. Cap. - 3 Yr. Avg. -56.8%
Return On Equity -108.8%
Return On Equity - 3 Yr. Avg. -80.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 8.3%
Gross Margin - 3 Yr. Avg. 33.7%
EBITDA Margin -250%
EBITDA Margin - 3 Yr. Avg. -255.3%
Operating Margin -241.7%
Oper. Margin - 3 Yr. Avg. -259.5%
Pre-Tax Margin -275%
Pre-Tax Margin - 3 Yr. Avg. -272.9%
Net Profit Margin -258.3%
Net Profit Margin - 3 Yr. Avg. -260.3%
Effective Tax Rate 6.1%
Eff/ Tax Rate - 3 Yr. Avg. 4.6%
Payout Ratio 0%

EVAR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EVAR stock intrinsic value calculation we used $12 million for the last fiscal year's total revenue generated by Lombard Medical. The default revenue input number comes from 2016 income statement of Lombard Medical. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our EVAR stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.5%, whose default value for EVAR is calculated based on our internal credit rating of Lombard Medical, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Lombard Medical.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of EVAR stock the variable cost ratio is equal to 358.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for EVAR stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.6% for Lombard Medical.

Corporate tax rate of 27% is the nominal tax rate for Lombard Medical. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the EVAR stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for EVAR are equal to 166.7%.

Life of production assets of 17.8 years is the average useful life of capital assets used in Lombard Medical operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for EVAR is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $14 million for Lombard Medical - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 27.956 million for Lombard Medical is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Lombard Medical at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ One Thing To Consider Before Buying Lombard Medical Inc (EVAR)   [Sep-20-17 09:57AM  Simply Wall St.]
▶ Lombard Medical Appoints New CEO   [Apr-20-17 02:25PM  Business Wire]
▶ Lombard Medical reports 4Q loss   [Apr-18-17 05:00AM  Associated Press]
▶ Lombard Medicals CEO Steps Down   [03:00AM  Business Wire]
▶ EVAR: $15M Investment, Additional Positive Outcomes Data   [10:00AM  Zacks Small Cap Research]
▶ EVAR: Benefits From IntelliFlex, Sales Reorg Not Yet Fully Realized   [Nov-01-16 02:00PM  Zacks Small Cap Research]
▶ LOMBARD MEDICAL, INC. Financials   [May-07-16 01:04PM  EDGAR Online Financials]
▶ 5 Stocks Under $10 Set to Soar: Must-See Charts   [Dec-24  08:49AM  at TheStreet]
▶ GigOptix Inc (GIG): Hedge Funds Are Snapping Up   [11:47AM  at Insider Monkey]
▶ Does Lombard Medical Inc (EVAR) Represent A Good Investment?   [Nov-26  08:51AM  at Insider Monkey]
▶ Lombard Medical Names David Milne to Board of Directors   [Sep-08  06:00AM  GlobeNewswire]
▶ Lombard Medical Set to Join Russell Microcap Index   [Jun-17  06:00AM  GlobeNewswire]
Financial statements of EVAR
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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