Intrinsic value of Lantheus Holdings - LNTH

Previous Close

$16.49

  Intrinsic Value

$4.05

stock screener

  Rating & Target

str. sell

-75%

Previous close

$16.49

 
Intrinsic value

$4.05

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of LNTH 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, %
  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
  338
  346
  355
  365
  376
  388
  401
  415
  431
  447
  465
  484
  504
  525
  548
  572
  597
  624
  653
  683
  714
  748
  783
  820
  859
  900
  943
  989
  1,037
  1,087
Variable operating expenses, $m
  275
  281
  288
  296
  305
  315
  325
  337
  349
  363
  374
  389
  405
  423
  441
  460
  481
  502
  525
  549
  575
  602
  630
  660
  691
  724
  759
  796
  834
  875
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
  275
  281
  288
  296
  305
  315
  325
  337
  349
  363
  374
  389
  405
  423
  441
  460
  481
  502
  525
  549
  575
  602
  630
  660
  691
  724
  759
  796
  834
  875
Operating income, $m
  63
  65
  67
  68
  71
  73
  76
  78
  81
  85
  91
  94
  98
  103
  107
  112
  117
  122
  127
  133
  139
  146
  153
  160
  168
  176
  184
  193
  202
  212
EBITDA, $m
  83
  85
  87
  90
  93
  96
  99
  102
  106
  110
  115
  119
  124
  129
  135
  141
  147
  154
  161
  168
  176
  184
  193
  202
  212
  222
  232
  244
  255
  268
Interest expense (income), $m
  24
  18
  16
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  47
  49
  52
  54
  57
  60
Earnings before tax, $m
  45
  49
  50
  52
  53
  55
  57
  59
  61
  63
  68
  71
  73
  76
  79
  83
  86
  90
  93
  98
  102
  106
  111
  116
  121
  127
  133
  139
  145
  152
Tax expense, $m
  12
  13
  14
  14
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  37
  39
  41
Net income, $m
  33
  36
  37
  38
  39
  40
  41
  43
  44
  46
  50
  52
  54
  56
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
  88
  93
  97
  101
  106
  111

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
  359
  367
  377
  388
  399
  412
  426
  441
  458
  475
  494
  514
  536
  558
  582
  608
  635
  663
  694
  725
  759
  795
  832
  871
  913
  956
  1,002
  1,051
  1,102
  1,155
Adjusted assets (=assets-cash), $m
  359
  367
  377
  388
  399
  412
  426
  441
  458
  475
  494
  514
  536
  558
  582
  608
  635
  663
  694
  725
  759
  795
  832
  871
  913
  956
  1,002
  1,051
  1,102
  1,155
Revenue / Adjusted assets
  0.942
  0.943
  0.942
  0.941
  0.942
  0.942
  0.941
  0.941
  0.941
  0.941
  0.941
  0.942
  0.940
  0.941
  0.942
  0.941
  0.940
  0.941
  0.941
  0.942
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
  0.941
Average production assets, $m
  111
  113
  116
  119
  123
  127
  131
  136
  141
  146
  152
  158
  165
  172
  179
  187
  195
  204
  213
  223
  234
  244
  256
  268
  281
  294
  308
  323
  339
  355
Working capital, $m
  28
  29
  29
  30
  31
  32
  33
  34
  36
  37
  39
  40
  42
  44
  45
  47
  50
  52
  54
  57
  59
  62
  65
  68
  71
  75
  78
  82
  86
  90
Total debt, $m
  234
  241
  250
  259
  270
  281
  294
  308
  322
  338
  355
  373
  392
  413
  434
  457
  482
  507
  535
  563
  593
  625
  659
  694
  732
  771
  812
  856
  902
  950
Total liabilities, $m
  323
  331
  339
  349
  359
  371
  384
  397
  412
  428
  445
  463
  482
  502
  524
  547
  571
  597
  624
  653
  683
  715
  749
  784
  821
  861
  902
  946
  991
  1,040
Total equity, $m
  36
  37
  38
  39
  40
  41
  43
  44
  46
  48
  49
  51
  54
  56
  58
  61
  63
  66
  69
  73
  76
  79
  83
  87
  91
  96
  100
  105
  110
  116
Total liabilities and equity, $m
  359
  368
  377
  388
  399
  412
  427
  441
  458
  476
  494
  514
  536
  558
  582
  608
  634
  663
  693
  726
  759
  794
  832
  871
  912
  957
  1,002
  1,051
  1,101
  1,156
Debt-to-equity ratio
  6.500
  6.560
  6.620
  6.690
  6.750
  6.820
  6.900
  6.970
  7.040
  7.110
  7.190
  7.260
  7.330
  7.390
  7.460
  7.520
  7.590
  7.650
  7.710
  7.760
  7.820
  7.870
  7.920
  7.970
  8.020
  8.060
  8.110
  8.150
  8.190
  8.220
Adjusted equity ratio
  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
  33
  36
  37
  38
  39
  40
  41
  43
  44
  46
  50
  52
  54
  56
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
  88
  93
  97
  101
  106
  111
Depreciation, amort., depletion, $m
  20
  20
  21
  21
  22
  23
  23
  24
  25
  26
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
Funds from operations, $m
  53
  56
  58
  59
  61
  63
  65
  67
  69
  72
  74
  76
  79
  83
  86
  90
  93
  97
  102
  106
  111
  116
  121
  127
  132
  139
  145
  152
  159
  166
Change in working capital, $m
  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
  3
  4
  4
  4
  4
Cash from operations, $m
  53
  56
  57
  58
  60
  62
  64
  66
  68
  70
  72
  75
  78
  81
  84
  88
  91
  95
  99
  104
  108
  113
  118
  123
  129
  135
  141
  148
  155
  162
Maintenance CAPEX, $m
  -17
  -17
  -18
  -18
  -19
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
New CAPEX, $m
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
  -16
Cash from investing activities, $m
  -19
  -20
  -21
  -21
  -23
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -40
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -57
  -60
  -63
  -67
  -69
Free cash flow, $m
  33
  36
  36
  37
  38
  38
  39
  40
  42
  43
  43
  45
  46
  48
  50
  52
  54
  56
  58
  60
  63
  66
  68
  71
  74
  78
  81
  85
  89
  93
Issuance/(repayment) of debt, $m
  -35
  7
  8
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  44
  46
  48
Issuance/(repurchase) of shares, $m
  9
  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  
  -26
  7
  8
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  44
  46
  48
Total cash flow (excl. dividends), $m
  7
  43
  45
  46
  48
  50
  52
  54
  56
  59
  60
  63
  66
  68
  71
  75
  78
  82
  85
  89
  93
  98
  102
  107
  112
  117
  123
  128
  135
  141
Retained Cash Flow (-), $m
  -42
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Prev. year cash balance distribution, $m
  30
  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
  -5
  42
  44
  45
  47
  49
  51
  53
  55
  57
  58
  61
  63
  66
  69
  72
  75
  79
  82
  86
  90
  94
  98
  103
  108
  113
  118
  124
  129
  136
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  -4
  36
  34
  31
  29
  27
  24
  22
  19
  17
  14
  12
  10
  9
  7
  6
  4
  3
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Lantheus Holdings, Inc. is engaged in the development, manufacture and commercialization of diagnostic medical imaging agents and products that assist clinicians in the diagnosis and treatment of cardiovascular and other diseases. Its imaging agents and products are used across a range of imaging modalities, including echocardiography and nuclear imaging. It operates in two segments: U.S. Segment and International Segment. The U.S. Segment produces and markets its medical imaging agents and products throughout the United States. In the United States, it sells its products to radiopharmacies, integrated delivery networks, hospitals, clinics and group practices. The International Segment operations consist of production and distribution activities in Puerto Rico and direct distribution activities in Canada. Its portfolio of nine commercial products is diversified across a range of imaging modalities. Its products include an ultrasound contrast agent and medical radiopharmaceuticals.

FINANCIAL RATIOS  of  Lantheus Holdings (LNTH)

Valuation Ratios
P/E Ratio 22.5
Price to Sales 2
Price to Book -5.7
Price to Tangible Book
Price to Cash Flow 12.1
Price to Free Cash Flow 14.1
Growth Rates
Sales Growth Rate 3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -46.2%
Cap. Spend. - 3 Yr. Gr. Rate 7%
Financial Strength
Quick Ratio 13
Current Ratio 0.1
LT Debt to Equity -256.1%
Total Debt to Equity -259.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 20.1%
Ret/ On Assets - 3 Yr. Avg. 21.5%
Return On Total Capital 15.9%
Ret/ On T. Cap. - 3 Yr. Avg. 1.5%
Return On Equity -18.5%
Return On Equity - 3 Yr. Avg. -3.2%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 45.7%
Gross Margin - 3 Yr. Avg. 44.6%
EBITDA Margin 23.2%
EBITDA Margin - 3 Yr. Avg. 19.4%
Operating Margin 18.2%
Oper. Margin - 3 Yr. Avg. 13.6%
Pre-Tax Margin 9.3%
Pre-Tax Margin - 3 Yr. Avg. 1.5%
Net Profit Margin 8.9%
Net Profit Margin - 3 Yr. Avg. 0.8%
Effective Tax Rate 3.6%
Eff/ Tax Rate - 3 Yr. Avg. -40.5%
Payout Ratio 0%

LNTH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LNTH stock intrinsic value calculation we used $331.378 million for the last fiscal year's total revenue generated by Lantheus Holdings. The default revenue input number comes from 0001 income statement of Lantheus Holdings. 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 LNTH 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 8.3%, whose default value for LNTH is calculated based on our internal credit rating of Lantheus Holdings, 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 Lantheus Holdings.
    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 LNTH stock the variable cost ratio is equal to 81.3%.

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 LNTH 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 6.7% for Lantheus Holdings.

Corporate tax rate of 27% is the nominal tax rate for Lantheus Holdings. 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 LNTH 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 LNTH are equal to 32.7%.

Life of production assets of 6.4 years is the average useful life of capital assets used in Lantheus Holdings 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 LNTH is equal to 8.3%. 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 - $23.291 million for Lantheus Holdings - 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 38.3 million for Lantheus Holdings 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 Lantheus Holdings at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

▶ Lantheus Holdings: 3Q Earnings Snapshot   [05:11PM  Associated Press]
▶ Lantheus Holdings: 2Q Earnings Snapshot   [05:50PM  Associated Press]
▶ Lantheus Holdings: 1Q Earnings Snapshot   [May-02-18 05:46PM  Associated Press]
▶ New Strong Sell Stocks for March 21st   [Mar-21-18 09:13AM  Zacks]
▶ Lantheus Holdings posts 4Q profit   [Feb-26-18 05:02PM  Associated Press]
▶ 7 Stocks Ready to Jump Another 30% in 2018   [Dec-19-17 01:37PM  InvestorPlace]
▶ Lantheus Holdings beats 3Q profit forecasts   [Nov-02-17 05:44PM  Associated Press]

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