Intrinsic value of Lannett - LCI

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$24.25

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$24.25

 
Intrinsic value

$176.41

 
Up/down potential

+627%

 
Rating

str. buy

 
Value-price divergence* premium content

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

We calculate the intrinsic value of LCI 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 0.9

 

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, %
  39.07
  34.60
  31.64
  28.98
  26.58
  24.42
  22.48
  20.73
  19.16
  17.74
  16.47
  15.32
  14.29
  13.36
  12.52
  11.77
  11.09
  10.48
  9.94
  9.44
  9.00
  8.60
  8.24
  7.91
  7.62
  7.36
  7.12
  6.91
  6.72
  6.55
  6.39
Revenue, $m
  566
  762
  1,003
  1,293
  1,637
  2,037
  2,495
  3,012
  3,589
  4,226
  4,922
  5,676
  6,487
  7,354
  8,275
  9,249
  10,275
  11,352
  12,480
  13,659
  14,888
  16,168
  17,500
  18,885
  20,325
  21,821
  23,376
  24,992
  26,672
  28,418
  30,236
Variable operating expenses, $m
 
  325
  417
  529
  660
  814
  989
  1,187
  1,408
  1,652
  1,918
  2,174
  2,485
  2,816
  3,169
  3,542
  3,935
  4,348
  4,780
  5,231
  5,702
  6,192
  6,702
  7,233
  7,784
  8,357
  8,953
  9,572
  10,215
  10,884
  11,580
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
  438
  325
  417
  529
  660
  814
  989
  1,187
  1,408
  1,652
  1,918
  2,174
  2,485
  2,816
  3,169
  3,542
  3,935
  4,348
  4,780
  5,231
  5,702
  6,192
  6,702
  7,233
  7,784
  8,357
  8,953
  9,572
  10,215
  10,884
  11,580
Operating income, $m
  128
  437
  585
  765
  977
  1,224
  1,506
  1,825
  2,181
  2,574
  3,004
  3,502
  4,003
  4,537
  5,106
  5,707
  6,340
  7,005
  7,701
  8,428
  9,186
  9,976
  10,798
  11,652
  12,541
  13,464
  14,423
  15,420
  16,457
  17,534
  18,656
EBITDA, $m
  161
  503
  662
  853
  1,080
  1,344
  1,646
  1,988
  2,368
  2,788
  3,248
  3,745
  4,280
  4,852
  5,460
  6,103
  6,780
  7,490
  8,235
  9,012
  9,823
  10,668
  11,547
  12,461
  13,411
  14,398
  15,424
  16,490
  17,598
  18,751
  19,950
Interest expense (income), $m
  53
  88
  124
  168
  221
  284
  357
  440
  535
  640
  756
  883
  1,021
  1,169
  1,327
  1,495
  1,673
  1,860
  2,057
  2,263
  2,478
  2,702
  2,936
  3,179
  3,431
  3,694
  3,967
  4,251
  4,546
  4,852
  5,171
Earnings before tax, $m
  62
  348
  461
  596
  756
  940
  1,149
  1,385
  1,646
  1,934
  2,247
  2,619
  2,982
  3,368
  3,779
  4,212
  4,667
  5,144
  5,644
  6,165
  6,708
  7,274
  7,862
  8,474
  9,109
  9,770
  10,456
  11,169
  11,911
  12,682
  13,485
Tax expense, $m
  17
  94
  125
  161
  204
  254
  310
  374
  445
  522
  607
  707
  805
  909
  1,020
  1,137
  1,260
  1,389
  1,524
  1,665
  1,811
  1,964
  2,123
  2,288
  2,460
  2,638
  2,823
  3,016
  3,216
  3,424
  3,641
Net income, $m
  45
  254
  337
  435
  552
  686
  839
  1,011
  1,202
  1,412
  1,640
  1,912
  2,177
  2,459
  2,758
  3,074
  3,407
  3,755
  4,120
  4,501
  4,897
  5,310
  5,739
  6,186
  6,650
  7,132
  7,633
  8,154
  8,695
  9,258
  9,844

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  239
  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
  1,764
  2,053
  2,703
  3,486
  4,413
  5,491
  6,725
  8,119
  9,675
  11,391
  13,267
  15,300
  17,486
  19,822
  22,304
  24,930
  27,696
  30,599
  33,640
  36,817
  40,129
  43,580
  47,171
  50,904
  54,785
  58,817
  63,008
  67,364
  71,891
  76,599
  81,497
Adjusted assets (=assets-cash), $m
  1,525
  2,053
  2,703
  3,486
  4,413
  5,491
  6,725
  8,119
  9,675
  11,391
  13,267
  15,300
  17,486
  19,822
  22,304
  24,930
  27,696
  30,599
  33,640
  36,817
  40,129
  43,580
  47,171
  50,904
  54,785
  58,817
  63,008
  67,364
  71,891
  76,599
  81,497
Revenue / Adjusted assets
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
  0.371
Average production assets, $m
  458
  616
  811
  1,046
  1,325
  1,648
  2,018
  2,437
  2,904
  3,419
  3,982
  4,592
  5,248
  5,949
  6,694
  7,482
  8,313
  9,184
  10,097
  11,050
  12,044
  13,080
  14,158
  15,278
  16,443
  17,653
  18,911
  20,218
  21,577
  22,990
  24,461
Working capital, $m
  306
  330
  434
  560
  709
  882
  1,080
  1,304
  1,554
  1,830
  2,131
  2,458
  2,809
  3,184
  3,583
  4,005
  4,449
  4,916
  5,404
  5,914
  6,447
  7,001
  7,578
  8,177
  8,801
  9,449
  10,122
  10,821
  11,549
  12,305
  13,092
Total debt, $m
  1,062
  1,242
  1,682
  2,212
  2,840
  3,569
  4,405
  5,349
  6,402
  7,564
  8,834
  10,210
  11,690
  13,271
  14,952
  16,729
  18,602
  20,568
  22,626
  24,777
  27,020
  29,356
  31,786
  34,314
  36,941
  39,671
  42,509
  45,457
  48,522
  51,710
  55,026
Total liabilities, $m
  1,210
  1,390
  1,830
  2,360
  2,988
  3,717
  4,553
  5,497
  6,550
  7,712
  8,982
  10,358
  11,838
  13,419
  15,100
  16,877
  18,750
  20,716
  22,774
  24,925
  27,168
  29,504
  31,934
  34,462
  37,089
  39,819
  42,657
  45,605
  48,670
  51,858
  55,174
Total equity, $m
  554
  663
  873
  1,126
  1,425
  1,774
  2,172
  2,623
  3,125
  3,679
  4,285
  4,942
  5,648
  6,402
  7,204
  8,052
  8,946
  9,884
  10,866
  11,892
  12,962
  14,076
  15,236
  16,442
  17,695
  18,998
  20,352
  21,758
  23,221
  24,742
  26,324
Total liabilities and equity, $m
  1,764
  2,053
  2,703
  3,486
  4,413
  5,491
  6,725
  8,120
  9,675
  11,391
  13,267
  15,300
  17,486
  19,821
  22,304
  24,929
  27,696
  30,600
  33,640
  36,817
  40,130
  43,580
  47,170
  50,904
  54,784
  58,817
  63,009
  67,363
  71,891
  76,600
  81,498
Debt-to-equity ratio
  1.917
  1.870
  1.930
  1.960
  1.990
  2.010
  2.030
  2.040
  2.050
  2.060
  2.060
  2.070
  2.070
  2.070
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.080
  2.090
  2.090
  2.090
  2.090
  2.090
  2.090
  2.090
  2.090
  2.090
  2.090
Adjusted equity ratio
  0.207
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  45
  254
  337
  435
  552
  686
  839
  1,011
  1,202
  1,412
  1,640
  1,912
  2,177
  2,459
  2,758
  3,074
  3,407
  3,755
  4,120
  4,501
  4,897
  5,310
  5,739
  6,186
  6,650
  7,132
  7,633
  8,154
  8,695
  9,258
  9,844
Depreciation, amort., depletion, $m
  33
  66
  76
  89
  103
  121
  140
  162
  187
  214
  244
  243
  278
  315
  354
  396
  440
  486
  534
  585
  637
  692
  749
  808
  870
  934
  1,001
  1,070
  1,142
  1,216
  1,294
Funds from operations, $m
  173
  320
  413
  524
  655
  806
  979
  1,173
  1,389
  1,626
  1,885
  2,155
  2,454
  2,774
  3,113
  3,470
  3,847
  4,241
  4,654
  5,085
  5,534
  6,002
  6,489
  6,994
  7,520
  8,066
  8,634
  9,223
  9,837
  10,474
  11,138
Change in working capital, $m
  38
  85
  104
  126
  149
  173
  198
  224
  250
  276
  301
  327
  351
  375
  399
  422
  444
  466
  488
  510
  532
  554
  577
  600
  623
  648
  673
  700
  727
  756
  787
Cash from operations, $m
  135
  569
  309
  398
  506
  633
  781
  949
  1,139
  1,350
  1,583
  1,828
  2,103
  2,398
  2,714
  3,049
  3,402
  3,775
  4,166
  4,575
  5,002
  5,448
  5,912
  6,395
  6,896
  7,418
  7,960
  8,524
  9,109
  9,718
  10,351
Maintenance CAPEX, $m
  0
  -24
  -33
  -43
  -55
  -70
  -87
  -107
  -129
  -154
  -181
  -211
  -243
  -278
  -315
  -354
  -396
  -440
  -486
  -534
  -585
  -637
  -692
  -749
  -808
  -870
  -934
  -1,001
  -1,070
  -1,142
  -1,216
New CAPEX, $m
  -24
  -158
  -195
  -235
  -278
  -323
  -370
  -418
  -467
  -515
  -563
  -610
  -656
  -701
  -745
  -788
  -830
  -872
  -913
  -953
  -994
  -1,036
  -1,078
  -1,121
  -1,165
  -1,210
  -1,258
  -1,307
  -1,359
  -1,413
  -1,470
Cash from investing activities, $m
  -959
  -182
  -228
  -278
  -333
  -393
  -457
  -525
  -596
  -669
  -744
  -821
  -899
  -979
  -1,060
  -1,142
  -1,226
  -1,312
  -1,399
  -1,487
  -1,579
  -1,673
  -1,770
  -1,870
  -1,973
  -2,080
  -2,192
  -2,308
  -2,429
  -2,555
  -2,686
Free cash flow, $m
  -824
  387
  81
  120
  173
  240
  323
  424
  543
  682
  839
  1,007
  1,204
  1,420
  1,654
  1,906
  2,176
  2,463
  2,767
  3,087
  3,423
  3,775
  4,142
  4,525
  4,923
  5,338
  5,769
  6,216
  6,681
  7,163
  7,665
Issuance/(repayment) of debt, $m
  754
  358
  440
  530
  627
  730
  836
  944
  1,053
  1,162
  1,270
  1,376
  1,480
  1,582
  1,681
  1,777
  1,872
  1,966
  2,058
  2,151
  2,243
  2,336
  2,431
  2,528
  2,627
  2,730
  2,837
  2,949
  3,065
  3,187
  3,316
Issuance/(repurchase) of shares, $m
  3
  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 from financing (excl. dividends), $m  
  848
  358
  440
  530
  627
  730
  836
  944
  1,053
  1,162
  1,270
  1,376
  1,480
  1,582
  1,681
  1,777
  1,872
  1,966
  2,058
  2,151
  2,243
  2,336
  2,431
  2,528
  2,627
  2,730
  2,837
  2,949
  3,065
  3,187
  3,316
Total cash flow (excl. dividends), $m
  24
  745
  521
  651
  800
  969
  1,159
  1,368
  1,596
  1,844
  2,109
  2,384
  2,684
  3,001
  3,335
  3,684
  4,049
  4,429
  4,826
  5,238
  5,666
  6,111
  6,573
  7,052
  7,551
  8,068
  8,606
  9,165
  9,746
  10,351
  10,981
Retained Cash Flow (-), $m
  -91
  -170
  -210
  -253
  -299
  -348
  -399
  -450
  -502
  -554
  -606
  -657
  -706
  -755
  -802
  -848
  -893
  -938
  -982
  -1,026
  -1,070
  -1,115
  -1,160
  -1,206
  -1,253
  -1,303
  -1,354
  -1,407
  -1,462
  -1,521
  -1,582
Prev. year cash balance distribution, $m
 
  61
  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
 
  636
  311
  398
  501
  621
  760
  917
  1,094
  1,289
  1,503
  1,727
  1,978
  2,247
  2,533
  2,836
  3,155
  3,491
  3,844
  4,212
  4,596
  4,996
  5,413
  5,847
  6,297
  6,765
  7,252
  7,758
  8,283
  8,830
  9,399
Discount rate, %
 
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.18
  22.24
  23.35
  24.52
  25.74
  27.03
  28.38
  29.80
  31.29
  32.85
  34.50
  36.22
PV of cash for distribution, $m
 
  584
  261
  301
  340
  374
  401
  420
  430
  429
  418
  396
  368
  334
  295
  255
  215
  176
  141
  109
  83
  61
  43
  30
  20
  13
  8
  5
  3
  2
  1
Current shareholders' claim on cash, %
  100
  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
  100.0

Lannett Company, Inc. develops, manufactures, packages, markets, and distributes generic versions of brand pharmaceutical products in the United States. It offers solid oral, extended release, topical, nasal, and oral solution finished dosage forms of drugs that address a range of therapeutic areas, as well as ophthalmic, patch, foam, buccal, sublingual, soft gel, and injectable dosages. The company provides its products for various medical indications comprising glaucoma, muscle relaxant, migraine, anesthetic, congestive heart failure, gastrointestinal, cardiovascular, thyroid deficiency, central nervous system, urinary, dryness of the mouth, gout, hypertension, and gallstone. It also manufactures active pharmaceutical ingredients. Lannett Company, Inc. markets its products under the Diamox, Fioricet, Fiorinal, Lanoxin, MiraLAX, Imdur, Levoxyl/Synthroid, Metadate CD, Concerta, Procardia, Prilosec, Ditropan, Protonix, Salagen, Dyazide, and Actigall brands. The company sells its pharmaceutical products to generic pharmaceutical distributors, drug wholesalers, chain drug retailers, private label distributors, mail-order pharmacies, other pharmaceutical manufacturers, managed care organizations, hospital buying groups, governmental entities, and health maintenance organizations. The company has supply and development agreements with JSP, Summit Bioscience LLC, HEC Pharm Group, and Pharma Pass II LLC. Lannett Company, Inc. was founded in 1942 and is based in Philadelphia, Pennsylvania.

FINANCIAL RATIOS  of  Lannett (LCI)

Valuation Ratios
P/E Ratio 19.7
Price to Sales 1.6
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 6.6
Price to Free Cash Flow 8
Growth Rates
Sales Growth Rate 39.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 159.6%
Total Debt to Equity 191.7%
Interest Coverage 2
Management Effectiveness
Return On Assets 7.3%
Ret/ On Assets - 3 Yr. Avg. 21.6%
Return On Total Capital 4.3%
Ret/ On T. Cap. - 3 Yr. Avg. 23.4%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 25.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 54.8%
Gross Margin - 3 Yr. Avg. 62.1%
EBITDA Margin 26.1%
EBITDA Margin - 3 Yr. Avg. 39.5%
Operating Margin 22.6%
Oper. Margin - 3 Yr. Avg. 36.8%
Pre-Tax Margin 11%
Pre-Tax Margin - 3 Yr. Avg. 33.2%
Net Profit Margin 8%
Net Profit Margin - 3 Yr. Avg. 21.9%
Effective Tax Rate 27.4%
Eff/ Tax Rate - 3 Yr. Avg. 32.7%
Payout Ratio 0%

LCI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LCI stock intrinsic value calculation we used $566 million for the last fiscal year's total revenue generated by Lannett. The default revenue input number comes from 2016 income statement of Lannett. 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 LCI stock valuation model: a) initial revenue growth rate of 34.6% 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 8.8%, whose default value for LCI is calculated based on our internal credit rating of Lannett, 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 Lannett.
    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 LCI stock the variable cost ratio is equal to 44.2%.

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 LCI 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 10% for Lannett.

Corporate tax rate of 27% is the nominal tax rate for Lannett. 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 LCI 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 LCI are equal to 80.9%.

Life of production assets of 18.9 years is the average useful life of capital assets used in Lannett 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 LCI is equal to 43.3%. 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 - $554 million for Lannett - 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 36.941 million for Lannett 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 Lannett at the current share price and the inputted number of shares is $0.9 billion.


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COMPANY NEWS

▶ Akorn Acquisition Talks Send Generic Drugmakers Into Orbit   [Apr-10-17 04:31PM  Investor's Business Daily]
▶ Lannett Refuses to Go Lower   [Apr-03-17 12:14PM  TheStreet.com]
▶ 3 Top Generic Drug Companies to Buy in 2017   [Mar-24-17 02:43PM  Motley Fool]
▶ 3 Top Generic Drug Companies to Buy in 2017   [02:43PM  at Motley Fool]
▶ Lannett Announces Addition To Management Team   [Feb-23-17 06:53AM  PR Newswire]
▶ FDA gives Lannett more time to make its case for ADHD drug   [Feb-22-17 11:25AM  at bizjournals.com]
Stock chart of LCI Financial statements of LCI
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