Intrinsic value of LeMaitre Vascular, Inc. - LMAT

Previous Close

$30.37

  Intrinsic Value

$12.88

stock screener

  Rating & Target

str. sell

-58%

Previous close

$30.37

 
Intrinsic value

$12.88

 
Up/down potential

-58%

 
Rating

str. 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 0.6

 

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, %
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
Revenue, $m
  115
  124
  134
  144
  155
  166
  177
  189
  201
  214
  227
  241
  256
  271
  286
  303
  320
  338
  356
  376
  396
  418
  440
  463
  488
  513
  540
  568
  598
  629
Variable operating expenses, $m
  91
  98
  105
  113
  121
  129
  137
  146
  155
  165
  171
  181
  192
  203
  215
  227
  240
  253
  267
  282
  297
  313
  330
  348
  366
  385
  405
  426
  449
  472
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
  91
  98
  105
  113
  121
  129
  137
  146
  155
  165
  171
  181
  192
  203
  215
  227
  240
  253
  267
  282
  297
  313
  330
  348
  366
  385
  405
  426
  449
  472
Operating income, $m
  24
  27
  29
  32
  34
  37
  40
  43
  46
  49
  57
  60
  64
  68
  71
  76
  80
  84
  89
  94
  99
  104
  110
  116
  122
  128
  135
  142
  149
  157
EBITDA, $m
  32
  34
  37
  40
  43
  46
  49
  52
  55
  59
  63
  66
  70
  74
  79
  83
  88
  93
  98
  103
  109
  115
  121
  127
  134
  141
  149
  156
  164
  173
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
Earnings before tax, $m
  24
  27
  29
  31
  34
  36
  39
  42
  45
  48
  55
  59
  62
  66
  70
  73
  78
  82
  86
  91
  96
  101
  106
  112
  118
  124
  130
  137
  144
  151
Tax expense, $m
  7
  7
  8
  8
  9
  10
  11
  11
  12
  13
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
Net income, $m
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  40
  43
  45
  48
  51
  54
  57
  60
  63
  66
  70
  74
  77
  82
  86
  90
  95
  100
  105
  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
  135
  147
  158
  170
  182
  195
  209
  223
  237
  252
  268
  284
  301
  319
  337
  357
  377
  398
  420
  443
  467
  492
  518
  546
  574
  605
  636
  669
  704
  740
Adjusted assets (=assets-cash), $m
  135
  147
  158
  170
  182
  195
  209
  223
  237
  252
  268
  284
  301
  319
  337
  357
  377
  398
  420
  443
  467
  492
  518
  546
  574
  605
  636
  669
  704
  740
Revenue / Adjusted assets
  0.852
  0.844
  0.848
  0.847
  0.852
  0.851
  0.847
  0.848
  0.848
  0.849
  0.847
  0.849
  0.850
  0.850
  0.849
  0.849
  0.849
  0.849
  0.848
  0.849
  0.848
  0.850
  0.849
  0.848
  0.850
  0.848
  0.849
  0.849
  0.849
  0.850
Average production assets, $m
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  82
  87
  92
  97
  102
  108
  114
  120
  127
  133
  140
  148
  156
  164
  172
  181
  190
Working capital, $m
  29
  31
  33
  36
  38
  41
  44
  47
  50
  53
  56
  60
  63
  67
  71
  75
  79
  84
  88
  93
  98
  104
  109
  115
  121
  127
  134
  141
  148
  156
Total debt, $m
  2
  4
  6
  8
  11
  13
  15
  18
  21
  23
  26
  29
  32
  35
  39
  42
  46
  50
  54
  58
  63
  67
  72
  77
  82
  88
  94
  100
  106
  113
Total liabilities, $m
  25
  27
  29
  31
  33
  36
  38
  41
  43
  46
  49
  52
  55
  58
  62
  65
  69
  73
  77
  81
  85
  90
  95
  100
  105
  111
  116
  122
  129
  135
Total equity, $m
  111
  120
  129
  139
  149
  159
  170
  182
  194
  206
  219
  232
  246
  260
  276
  291
  308
  325
  343
  362
  381
  402
  423
  446
  469
  494
  520
  547
  575
  605
Total liabilities and equity, $m
  136
  147
  158
  170
  182
  195
  208
  223
  237
  252
  268
  284
  301
  318
  338
  356
  377
  398
  420
  443
  466
  492
  518
  546
  574
  605
  636
  669
  704
  740
Debt-to-equity ratio
  0.020
  0.030
  0.050
  0.060
  0.070
  0.080
  0.090
  0.100
  0.110
  0.110
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.150
  0.160
  0.160
  0.160
  0.170
  0.170
  0.170
  0.180
  0.180
  0.180
  0.180
  0.180
  0.190
Adjusted equity ratio
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817
  0.817

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  40
  43
  45
  48
  51
  54
  57
  60
  63
  66
  70
  74
  77
  82
  86
  90
  95
  100
  105
  110
Depreciation, amort., depletion, $m
  7
  8
  8
  8
  8
  9
  9
  9
  10
  10
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
Funds from operations, $m
  25
  27
  29
  31
  33
  35
  37
  40
  42
  45
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  89
  93
  98
  103
  109
  114
  120
  126
Change in working capital, $m
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
Cash from operations, $m
  23
  25
  26
  28
  30
  33
  35
  37
  39
  42
  43
  46
  48
  51
  54
  57
  61
  64
  67
  71
  75
  79
  83
  88
  92
  97
  102
  107
  113
  119
Maintenance CAPEX, $m
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
New CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
Cash from investing activities, $m
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -9
  -9
  -9
  -9
  -10
  -10
  -12
  -12
  -12
  -13
  -13
  -15
  -15
  -16
  -16
  -18
  -18
  -19
  -21
  -21
  -23
  -24
  -24
Free cash flow, $m
  17
  19
  20
  22
  24
  25
  27
  29
  31
  33
  33
  36
  38
  40
  43
  45
  48
  50
  53
  56
  59
  62
  66
  69
  73
  77
  81
  85
  89
  94
Issuance/(repayment) of debt, $m
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
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  
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
Total cash flow (excl. dividends), $m
  20
  21
  22
  24
  26
  28
  29
  31
  33
  35
  36
  39
  41
  43
  46
  49
  51
  54
  57
  60
  64
  67
  71
  74
  78
  82
  87
  91
  96
  101
Retained Cash Flow (-), $m
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -24
  -25
  -26
  -27
  -28
  -30
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
  39
  12
  13
  14
  16
  17
  18
  20
  21
  23
  24
  25
  27
  29
  31
  33
  35
  37
  39
  42
  44
  46
  49
  52
  55
  58
  61
  64
  67
  71
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
  37
  11
  11
  12
  12
  12
  12
  12
  12
  12
  11
  11
  10
  10
  9
  8
  8
  7
  6
  5
  5
  4
  3
  3
  2
  2
  1
  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, Inc. (LMAT)

Valuation Ratios
P/E Ratio 51.3
Price to Sales 6.3
Price to Book 6.4
Price to Tangible Book
Price to Cash Flow 33.2
Price to Free Cash Flow 40.3
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 $106 million for the last fiscal year's total revenue generated by LeMaitre Vascular, Inc.. The default revenue input number comes from 0001 income statement of LeMaitre Vascular, Inc.. 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 8.5% 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, Inc., 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, Inc..
    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 79.2%.

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 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for LeMaitre Vascular, Inc.. 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 30.3%.

Life of production assets of 11.8 years is the average useful life of capital assets used in LeMaitre Vascular, Inc. 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 24.8%. 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 - $130.235 million for LeMaitre Vascular, Inc. - 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 19.647 million for LeMaitre Vascular, Inc. 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, Inc. at the current share price and the inputted number of shares is $0.6 billion.

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