Intrinsic value of LeMaitre Vascular - LMAT

Previous Close

$26.84

  Intrinsic Value

$15.05

stock screener

  Rating & Target

sell

-44%

Previous close

$26.84

 
Intrinsic value

$15.05

 
Up/down potential

-44%

 
Rating

sell

We calculate the intrinsic value of LMAT 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 0001), $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 0.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
  4.97
  4.98
  4.98
  4.98
  4.98
  4.98
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  4.99
  5.00
Revenue, $m
  106
  111
  116
  122
  128
  135
  141
  148
  156
  163
  171
  180
  189
  198
  208
  218
  229
  241
  253
  265
  279
  293
  307
  322
  339
  355
  373
  392
  411
  432
Variable operating expenses, $m
  62
  65
  68
  71
  74
  78
  81
  85
  89
  93
  95
  99
  104
  109
  115
  121
  127
  133
  140
  147
  154
  162
  170
  178
  187
  196
  206
  216
  227
  239
Fixed operating expenses, $m
  21
  22
  22
  23
  23
  24
  24
  25
  26
  26
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
  35
  36
  37
  38
  39
  39
  40
Total operating expenses, $m
  83
  87
  90
  94
  97
  102
  105
  110
  115
  119
  122
  126
  132
  137
  144
  151
  157
  164
  172
  179
  187
  196
  205
  213
  223
  233
  244
  255
  266
  279
Operating income, $m
  23
  25
  27
  29
  31
  33
  36
  38
  41
  44
  50
  53
  57
  60
  64
  68
  72
  77
  81
  86
  92
  97
  103
  109
  115
  122
  129
  137
  145
  153
EBITDA, $m
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  58
  61
  65
  69
  74
  78
  83
  88
  93
  99
  104
  111
  117
  124
  131
  139
  147
  155
  164
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
Earnings before tax, $m
  23
  25
  26
  28
  31
  33
  35
  38
  40
  43
  50
  53
  56
  60
  63
  67
  71
  76
  80
  85
  90
  96
  101
  107
  113
  120
  127
  134
  142
  150
Tax expense, $m
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  31
  32
  34
  36
  38
  41
Net income, $m
  17
  18
  19
  21
  22
  24
  26
  28
  30
  32
  36
  38
  41
  43
  46
  49
  52
  55
  59
  62
  66
  70
  74
  78
  83
  88
  93
  98
  104
  110

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  103
  108
  113
  118
  124
  130
  137
  144
  151
  158
  166
  174
  183
  192
  202
  212
  222
  233
  245
  257
  270
  283
  298
  312
  328
  344
  362
  380
  399
  419
Adjusted assets (=assets-cash), $m
  103
  108
  113
  118
  124
  130
  137
  144
  151
  158
  166
  174
  183
  192
  202
  212
  222
  233
  245
  257
  270
  283
  298
  312
  328
  344
  362
  380
  399
  419
Revenue / Adjusted assets
  1.029
  1.028
  1.027
  1.034
  1.032
  1.038
  1.029
  1.028
  1.033
  1.032
  1.030
  1.034
  1.033
  1.031
  1.030
  1.028
  1.032
  1.034
  1.033
  1.031
  1.033
  1.035
  1.030
  1.032
  1.034
  1.032
  1.030
  1.032
  1.030
  1.031
Average production assets, $m
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
  45
  47
  50
  52
  55
  57
  60
  63
  66
  70
  73
  77
  81
  85
  89
  93
  98
  103
  108
  114
Working capital, $m
  27
  28
  29
  31
  32
  34
  36
  37
  39
  41
  43
  45
  48
  50
  52
  55
  58
  61
  64
  67
  70
  74
  77
  81
  85
  90
  94
  99
  104
  109
Total debt, $m
  1
  2
  3
  3
  4
  5
  7
  8
  9
  10
  12
  13
  14
  16
  18
  19
  21
  23
  25
  27
  29
  31
  34
  36
  39
  42
  45
  48
  51
  54
Total liabilities, $m
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  38
  39
  41
  43
  46
  48
  50
  53
  55
  58
  61
  64
  67
  71
Total equity, $m
  85
  89
  94
  98
  103
  108
  114
  119
  125
  131
  138
  145
  152
  160
  168
  176
  185
  194
  204
  214
  224
  236
  247
  260
  273
  286
  301
  316
  331
  348
Total liabilities and equity, $m
  102
  107
  113
  118
  124
  130
  137
  143
  150
  158
  166
  174
  183
  192
  202
  212
  223
  233
  245
  257
  270
  284
  297
  313
  328
  344
  362
  380
  398
  419
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.040
  0.040
  0.050
  0.060
  0.060
  0.070
  0.080
  0.080
  0.090
  0.090
  0.100
  0.100
  0.110
  0.110
  0.120
  0.120
  0.130
  0.130
  0.130
  0.140
  0.140
  0.140
  0.150
  0.150
  0.150
  0.150
  0.160
Adjusted equity ratio
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831
  0.831

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  17
  18
  19
  21
  22
  24
  26
  28
  30
  32
  36
  38
  41
  43
  46
  49
  52
  55
  59
  62
  66
  70
  74
  78
  83
  88
  93
  98
  104
  110
Depreciation, amort., depletion, $m
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
Funds from operations, $m
  22
  24
  25
  27
  29
  31
  32
  34
  37
  39
  40
  43
  46
  48
  51
  54
  58
  61
  65
  69
  73
  77
  81
  86
  91
  96
  102
  108
  114
  120
Change in working capital, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
Cash from operations, $m
  21
  23
  24
  26
  27
  29
  31
  33
  35
  37
  38
  41
  43
  46
  49
  52
  55
  58
  62
  65
  69
  73
  78
  82
  87
  92
  98
  103
  109
  115
Maintenance CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
New CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Cash from investing activities, $m
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -12
  -14
  -14
  -15
  -15
Free cash flow, $m
  17
  19
  20
  21
  23
  24
  26
  27
  29
  31
  32
  34
  36
  39
  41
  44
  47
  50
  53
  56
  59
  63
  67
  71
  75
  79
  84
  89
  94
  100
Issuance/(repayment) of debt, $m
  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
  3
  3
  3
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  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
  3
  3
  3
Total cash flow (excl. dividends), $m
  19
  19
  21
  22
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  43
  46
  48
  51
  55
  58
  61
  65
  69
  73
  78
  82
  87
  92
  97
  103
Retained Cash Flow (-), $m
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
Prev. year cash balance distribution, $m
  28
  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
  43
  15
  16
  17
  19
  20
  21
  23
  24
  26
  27
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
  65
  69
  73
  77
  82
  87
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  41
  14
  14
  14
  15
  15
  14
  14
  14
  14
  13
  12
  12
  11
  10
  9
  9
  8
  7
  6
  5
  4
  4
  3
  3
  2
  2
  1
  1
  1
Current shareholders' claim on cash, %
  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

LeMaitre Vascular, Inc. is a provider of medical devices for the treatment of peripheral vascular disease. The Company develops, manufactures and markets medical devices and implants used primarily in the field of vascular surgery. It is engaged in the design, marketing, sales and technical support of medical devices and implants for the treatment of peripheral vascular disease industry segment. The Company's product lines include valvulotomes, balloon catheters, carotid shunts, biologic vascular patches, radiopaque marking tape, anastomotic clips, remote endarterectomy devices, laparoscopic cholecystectomy devices, prosthetic vascular grafts, biologic vascular grafts and powered phlebectomy devices. Its portfolio of peripheral vascular devices consists of brand name products that are used in arteries and veins outside of the heart, including the Expandable LeMaitre Valvulotome, the Pruitt F3 Carotid Shunt, VascuTape Radiopaque Tape and the XenoSure biologic patch.

FINANCIAL RATIOS  of  LeMaitre Vascular (LMAT)

Valuation Ratios
P/E Ratio 45.4
Price to Sales 5.6
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow 29.4
Price to Free Cash Flow 35.6
Growth Rates
Sales Growth Rate 14.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0.3
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 11.4%
Ret/ On Assets - 3 Yr. Avg. 8.7%
Return On Total Capital 13.3%
Ret/ On T. Cap. - 3 Yr. Avg. 10.2%
Return On Equity 13.3%
Return On Equity - 3 Yr. Avg. 10.2%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 70.8%
Gross Margin - 3 Yr. Avg. 69.2%
EBITDA Margin 22.5%
EBITDA Margin - 3 Yr. Avg. 17.7%
Operating Margin 18%
Oper. Margin - 3 Yr. Avg. 13.5%
Pre-Tax Margin 18%
Pre-Tax Margin - 3 Yr. Avg. 13.5%
Net Profit Margin 12.4%
Net Profit Margin - 3 Yr. Avg. 9.4%
Effective Tax Rate 31.3%
Eff/ Tax Rate - 3 Yr. Avg. 30.6%
Payout Ratio 27.3%

LMAT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LMAT stock intrinsic value calculation we used $100.867 million for the last fiscal year's total revenue generated by LeMaitre Vascular. The default revenue input number comes from 0001 income statement of LeMaitre Vascular. 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 LMAT stock valuation model: a) initial revenue growth rate of 4.9% 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 4.3%, whose default value for LMAT is calculated based on our internal credit rating of LeMaitre Vascular, 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 LeMaitre Vascular.
    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 LMAT stock the variable cost ratio is equal to 58.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21 million in the base year in the intrinsic value calculation for LMAT 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 5.4% for LeMaitre Vascular.

Corporate tax rate of 27% is the nominal tax rate for LeMaitre Vascular. 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 LMAT 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 LMAT are equal to 26.3%.

Life of production assets of 10.6 years is the average useful life of capital assets used in LeMaitre Vascular 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 LMAT is equal to 25.2%. 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 - $109.77 million for LeMaitre Vascular - 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 19.462 million for LeMaitre Vascular 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 LeMaitre Vascular at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

▶ How Much Money Does LeMaitre Vascular Inc (NASDAQ:LMAT) Make?   [Oct-29-18 03:19PM  Simply Wall St.]
▶ LeMaitre Vascular Acquires Cardial Business of BD   [Oct-24-18 04:50PM  GlobeNewswire]
▶ 3 Top Healthcare Stocks to Buy in October   [Oct-20-18 07:01AM  Motley Fool]
▶ LeMaitre: 3Q Earnings Snapshot   [05:21PM  Associated Press]
▶ 5 Healthcare Stocks That Are Down, But Not Out!   [Aug-29-18 11:52AM  InvestorPlace]
▶ This Company Proves That Thinking Small Can Pay Off Big   [Aug-27-18 11:19AM  Motley Fool]
▶ 3 Small-Cap Healthcare Stocks for Your Watch List   [Aug-26-18 07:15PM  Motley Fool]
▶ Here's Why LeMaitre Vascular Inc. Is Falling Today   [Apr-26-18 11:17AM  Motley Fool]
▶ LeMaitre: 1Q Earnings Snapshot   [Apr-25-18 05:43PM  Associated Press]
▶ LeMaitre Vascular Divests General Surgery Product Lines   [Apr-05-18 04:50PM  GlobeNewswire]
▶ LeMaitre beats 4Q profit forecasts   [Feb-21-18 04:27PM  Associated Press]
▶ 3 Top Healthcare Stocks to Buy Right Now   [Jan-16-18 10:47AM  Motley Fool]
▶ Should You Buy LeMaitre Vascular Inc (LMAT) Now?   [Nov-17-17 06:34AM  Simply Wall St.]
▶ 3 Unknown, but Amazing, Dividend Stocks   [Nov-08-17 06:00AM  Motley Fool]
▶ Why LeMaitre Vascular Inc. Is Plunging Today   [Oct-27-17 02:01PM  Motley Fool]
▶ LeMaitre beats 3Q profit forecasts   [Oct-26-17 06:53PM  Associated Press]
▶ Stocks With Rising Relative Strength: Penumbra   [Sep-27-17 03:00AM  Investor's Business Daily]
▶ Stocks With Rising Relative Price Strength: MiMedx   [Sep-25-17 03:00AM  Investor's Business Daily]
▶ 5 MedTech Stocks to Pick for Stellar Returns   [Sep-18-17 10:07AM  Zacks]
▶ 3 Dividend Healthcare Stocks   [Sep-15-17 06:00AM  Motley Fool]
▶ Heart-Felt Buys: 6 Cardiac Opportunities   [Aug-03-17 02:05PM  Forbes]
▶ LeMaitre tops Street 2Q forecasts   [Jul-28-17 08:04PM  Associated Press]
▶ 3 Under-the-Radar Stocks in the Healthcare Sector   [Jul-26-17 08:08AM  Motley Fool]
▶ LeMaitre Vascular Set to Join S&P SmallCap 600   [May-01-17 06:08PM  PR Newswire]

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