LWAY  Lifeway Foods Inc.

Exchange

NASDAQ

Sector

Consumer Non-Durables

Industry

Packaged Foods

Market Cap.

161.80M

Vuru Grade

30.02/100

Current Price

$10.07
-0.09 (-0.89%)

Growth Price

$3.87
Overvalued by 61.59%

Stability Price

$3.94
Overvalued by 60.88%

Company Metrics

  • P/E 102.76
  • P/S 1.32
  • P/B 3.31
  • EPS 0.1
  • Cash ROIC 4.77%
  • Cash Ratio 0.94
  • Dividend 0 / 0%
  • Avg. Vol. 12,534.00
  • Shares 16.07M
  • Market Cap. 161.80M

Company Description

Lifeway Foods, Inc., together with its subsidiaries, manufactures dairy and non-dairy health food products. It offers Kefir, a drinkable product under the Lifeway's Kefir, ProBugs, and Helios Nutrition Organic Kefir brand names; a plain farmer's cheese under the Lifeway's Farmer's Cheese brand name; a fruit sugar-flavored product under the Sweet Kiss brand name; and a dairy beverage under the Basi... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

Lifeway Foods, Inc. Appoints Jennifer Reilly as Senior Executive Vice ...
GlobeNewswire (press release) - May 2, 2016
MORTON GROVE, Ill., May 02, 2016 (GLOBE NEWSWIRE) -- Lifeway Foods, Inc., (Nasdaq:LWAY), the leading U.S. supplier of kefir cultured dairy products, today announced the appointment of Jennifer Reilly as Senior Executive Vice President of Sales.
Lifeway Foods Ramps Up Kefir Production at New Waukesha Facility
PR Newswire (press release) - Aug 21, 2015
MORTON GROVE, Ill., Aug. 21, 2015 /PRNewswire/ -- Lifeway Foods, Inc. (Nasdaq: LWAY), the nation's leading supplier of kefir cultured dairy products, today announced the beginning of kefir production at the former Golden Guernsey dairy plant in ...
Lifeway starts kefir production in Wisconsin - Food Business News
Former Golden Guernsey plant begins production of kefir - Milwaukee Journal Sentinel
Lifeway Foods, Inc. (LWAY) Commences $6M Common Stock Self-Tender Offer
StreetInsider.com - Jun 26, 2017
Lifeway Foods, Inc. (Nasdaq: LWAY) announced today that it has commenced a “modified Dutch auction” tender offer for up to $6 million of its common stock at a price per share not less than $8.50 and not greater than $9.50.
Is Lifeway Foods As Good For Your Portfolio As It Is For Your Health?
Seeking Alpha - Apr 20, 2016
For years Lifeway (NASDAQ:LWAY) has enjoyed the ride of the probiotics health craze. For years dieticians have known the benefits of probiotics and Kefir. This article, this article and even this one are a few of the articles touting their benefits ...
Lifeway Foods Inc. (LWAY) Moves Higher on Volume Spike for October 12
Equities.com - Oct 12, 2017
Lifeway Foods Inc. (LWAY) traded on unusually high volume on Oct. 12, as the stock gained 3.35% to close at $10.48. On the day, Lifeway Foods Inc. saw 27,063 shares trade hands on 373 trades. Considering that the stock averages only a daily volume of ...
Lifeway Foods' (LWAY) CEO Julie Smolyansky on Q3 2016 Results - Earnings Call ...
Seeking Alpha - Nov 11, 2016
Good morning, and welcome to Lifeway Foods earnings conference call to discuss the company's results for the third quarter 2016.
Lifeway Foods Inc. (LWAY) Soars 5.5% on October 10
Equities.com - Oct 10, 2017
Lifeway Foods Inc. (LWAY) had a good day on the market for Tuesday October 10 as shares jumped 5.5% to close at $9.98. About 16,021 shares traded hands on 232 trades for the day, compared with an average daily volume of 11,641 shares out of a total ...
Lifeway Foods, Inc. (NASDAQ:LWAY) Shares Move -2.14%
Concord Register - 11 hours ago
Lifeway Foods, Inc. (NASDAQ:LWAY) shares saw the needle move -2.14% on the week. The stock closed the most recent session at $10.07 after seeing 3472 shares trade hands.
Lifeway Foods, Inc. (NASDAQ:LWAY) Earnings Growth & Valuation in Focus - Midway Monitor
Lifeway Foods, Inc. (NASDAQ:LWAY) Traded Significantly Above Its 50 Day Moving ... - First News 24
For Lifeway Foods, Carli Lloyd 'Fair Play Means Fair Pay'
Forbes - Sep 16, 2016
These are the thoughts of Julie Smolyansky, CEO of Lifeway Foods, Inc., the leading U.S. supplier of kefir cultured dairy products, which in 2015 amassed $118.59 million in sales/revenue.
Lifeway Foods Inc. (LWAY) Moves Lower on Volume Spike for September 29
Equities.com - Sep 29, 2017
Lifeway Foods Inc. (LWAY) traded on unusually high volume on Sep. 29, as the stock lost 0.78% to close at $8.90. On the day, Lifeway Foods Inc. saw 39,589 shares trade hands on 417 trades. Considering that the stock averages only a daily volume of ...
Select food stocks break higher - Seeking Alpha
Lifeway Foods, Inc. (NASDAQ:LWAY) Experiences Lighter than Average Trading Volume - First News 24
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for LWAY to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate LWAY's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$10.07 Current Price

$3.87 Growth Price (DCF)

Overvalued by 61.59%


Growth Rate Assumed by Market: 53.89%


Future Free Cash Flow Growth Rate: 3.5%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$3.94 Stability Price (EPV)

Overvalued by 60.88%


Discount Rate: 15.0%

$0.67 NCA Price

Overvalued by 93.39%

$16.52 Book Price

Undervalued by 64.03%


Poor Cash Return on Invested Capital over the past 5 years

LWAY has been unable to consistently generate sufficient returns from its investments in buildings, projects and equipment. This could be due to poor management, lack of an economic moat or the capital intensive nature of the business.

LWAY has only created $4.77 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20122013201420152016
Free Cash Flow 5.20M -2.64M 1.41M 4.75M 1.87M
divided by
Invested Capital 42.69M 48.95M 48.71M 46.23M 47.68M
Cash ROIC 12.18% -5.39% 2.89% 10.27% 3.92%

Poor Return on Equity over the past 5 years

LWAY has shown an inability to deliver strong results for shareholders. This could be due to poor management, LWAY operating in a highly competitive industry, or having a weak business in general.

LWAY has only generated $8.37 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20122013201420152016
Net Income 5.62M 4.99M 1.96M 1.97M 3.48M
divided by
Stockholders' Equity 39.31M 42.95M 44.70M 45.26M 48.36M
Return on Equity 14.30% 11.62% 4.38% 4.36% 7.19%

Excellent Business Performance over the past 10 years

LWAY has been able to maintain profitability in good times and bad. This could mean LWAY has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

LWAY has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Free Cash Flow 522,258.00 2.58M 5.84M 3.39M 2.60M 5.20M -2.64M 1.41M 4.75M 1.87M

Good Balance Sheet

LWAY's Total Assets double Total Liabilities. Its financial position is adequate. Remember to check Shareholders' Equity to see if it's stable or growing. It's one of the best measures of whether a company is creating value for shareholders.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Cash 7.59M 5.54M 5.67M 4.31M 2.81M 4.61M 5.84M 6.19M 7.86M 8.81M
Current Assets 15.92M 14.74M 16.62M 16.84M 16.70M 19.69M 24.75M 24.15M 26.85M 28.20M
Total Assets 34.77M 34.66M 51.47M 52.06M 51.47M 53.51M 63.67M 63.42M 64.92M 65.88M
Current Liabilities 3.14M 3.65M 8.56M 8.89M 7.07M 6.21M 8.88M 8.53M 10.82M 9.38M
Total Liabilities 8.95M 8.36M 18.90M 18.41M 16.12M 14.19M 20.72M 18.72M 19.66M 17.51M
Stockholder' Equity 25.81M 26.29M 32.57M 33.65M 35.36M 39.31M 42.95M 44.70M 45.26M 48.36M
Current Ratio 5.06 4.04 1.94 1.89 2.36 3.17 2.79 2.83 2.48 3.01
TL-to-TA 0.26 0.24 0.37 0.35 0.31 0.27 0.33 0.30 0.30 0.27

Consistent Reinvestment of Profits over the past 10 years

LWAY has consistently retained profits. This may put LWAY in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, LWAY can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Retained Earnings 20.47M 22.38M 27.95M 31.58M 34.43M 38.90M 42.59M 44.54M 46.52M 50.00M
Retained Earnings Growth - 9.34% 24.88% 12.96% 9.04% 12.99% 9.47% 4.59% 4.43% 7.48%

Competitive Industry over the past 10 years

LWAY is likely operating in an industry with medium to low barriers to entry. This may mean that LWAY doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that LWAY invests heavily in R&D and Sales, General & Administrative expenses.

Only $5.04 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Net Income 3.15M 1.91M 5.57M 3.62M 2.86M 5.62M 4.99M 1.96M 1.97M 3.48M
divided by
Revenue 38.73M 44.46M 58.12M 58.50M 69.97M 81.35M 97.52M 118.96M 118.59M 123.88M
Net Profit Margin 8.14% 4.30% 9.58% 6.19% 4.08% 6.91% 5.12% 1.64% 1.66% 2.81%

Satisfactory Pricing Power over the past 10 years

Consistency is vital. LWAY has been able to maintain gross margins fairly consistently, which is a strong indication of their ability to raise prices with inflation. This potentially leaves flexibility in inflationary environments to raise prices on consumers and maintain profitability.

$30.47 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Gross Profit 12.42M 12.76M 20.90M 20.18M 22.55M 27.43M 27.62M 28.86M 31.60M 35.03M
divided by
Revenue 38.73M 44.46M 58.12M 58.50M 69.97M 81.35M 97.52M 118.96M 118.59M 123.88M
Gross Margin 32.07% 28.69% 35.96% 34.49% 32.23% 33.71% 28.32% 24.26% 26.65% 28.28%

High Capital Intensity over the past 10 years

LWAY spends large amounts of capital buying new equipment or investing in new facilities to stay competitive. Over the long term, those costs may have to be fuelled by debt. Look at the growth of Shareholders' Equity to see if this strategy is having a positive or negative impact.

89.22% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Capital Expenditure 1.82M 2.16M 1.77M 2.23M 1.44M 1.43M 8.48M 3.68M 2.00M 3.24M
divided by
Net Income 3.15M 1.91M 5.57M 3.62M 2.86M 5.62M 4.99M 1.96M 1.97M 3.48M
Capital Expenditure Ratio 57.88% 112.81% 31.71% 61.54% 50.40% 25.42% 169.93% 188.32% 101.17% 93.04%

No Dividend History over the past 10 years

LWAY has never distributed dividends or has recently suspended their dividend distribution.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 16.86M 16.77M 16.80M 16.66M 16.44M 16.37M 16.35M 16.35M 16.33M 16.16M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 12.29 8.94 11.95 9.64 9.64 8.12 15.16 18.52 11.04 11.51
Dividend Yield - - - - - - - - - -

Strong History of Stock Buybacks over the past 10 years

LWAY has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in December
2007200820092010201120122013201420152016
Shares Outstanding 16.86M 16.77M 16.80M 16.66M 16.44M 16.37M 16.35M 16.35M 16.33M 16.16M
Stock Bought Back - 0.54% -0.20% 0.81% 1.34% 0.43% 0.17% - 0.09% 1.06%
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