LWAY  Lifeway Foods Inc.

Exchange

NASDAQ

Sector

Consumer Non-Durables

Industry

Packaged Foods

Market Cap.

186.74M

Vuru Grade

31.02/100

Current Price

$11.57
-0.01 (-0.09%)

Growth Price

$3.45
Overvalued by 70.19%

Stability Price

$3.99
Overvalued by 65.51%

Company Metrics

  • P/E 56.44
  • P/S 1.52
  • P/B 3.92
  • EPS 0.2
  • Cash ROIC 5.24%
  • Cash Ratio 0.73
  • Dividend 0 / 0%
  • Avg. Vol. 30,436.00
  • Shares 16.14M
  • Market Cap. 186.74M

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. (LWAY) Moves Higher on Volume Spike for February 22
Equities.com - 6 hours ago
Lifeway Foods Inc. (LWAY) traded on unusually high volume on Feb. 22, as the stock gained 2.25% to close at $11.83. On the day, Lifeway Foods Inc. saw 136,005 shares trade hands on 650 trades. Considering that the stock averages only a daily volume of ...
Lifeway Foods Inc.
HollywoodChicago.com - Feb 22, 2017
CHICAGO - During the scourge of the AIDS epidemic, at its height in the late 1980s, a playwright lost her brother to the condition.
Lifeway Foods Inc. LWAY (US: Nasdaq)
Wall Street Journal - Feb 11, 2011
Lifeway Foods Inc. LWAY (U.S.: Nasdaq). search. View All companies. AT CLOSE 4:00 PM EST 01/25/17. $11.06 USD; -0.01 -0.09%.
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, Inc. Announces Results for the Second Quarter Ended June 30, 2016
GlobeNewswire (press release) - Aug 17, 2016
... CEO of Lifeway Foods, Inc. “Our team continues to build Lifeway's consumer awareness of our diverse portfolio of kefir products and we achieved increased distribution across retail sales channels.
Lifeway Foods' Recent Drop Doesn't Look Like A Buying Opportunity
Seeking Alpha - Aug 10, 2015
Niche beverage manufacturer Lifeway Foods has been enjoying relatively solid sales momentum in recent quarters, a trend that seems to have led to rising market expectations for profit growth.
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 (registration)
Former Golden Guernsey plant begins production of kefir - Milwaukee Journal Sentinel
Lifeway Foods Goes for the Gold with New Brand Ambassador Carli Lloyd
GlobeNewswire (press release) - Apr 20, 2016
MORTON GROVE, Ill., April 20, 2016 (GLOBE NEWSWIRE) -- Lifeway Foods, Inc. (Nasdaq:LWAY) today announced the appointment of 2015 FIFA Women's World Cup Champion Carli Lloyd to serve as brand ambassador for the company's kefir and other ...
Is Lifeway Foods As Good For Your Portfolio As It Is For Your Health? - Seeking Alpha
Lifeway Foods Inc. (LWAY) Plunges 5.02% on January 19
Equities.com - Jan 19, 2017
Lifeway Foods Inc. (LWAY) had a rough trading day for Thursday January 19 as shares tumbled 5.02%, or a loss of $-0.57 per share, to close at $10.78.
Lifeway Foods Is A New Niche In Health Food
Seeking Alpha (registration) - Jan 30, 2015
Lifeway Foods, Inc. (NASDAQ:LWAY) is the largest and only publicly-traded manufacturer of kefir, a cultured milk product.
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.

$11.57 Current Price

$3.45 Growth Price (DCF)

Overvalued by 70.19%


Growth Rate Assumed by Market: 70.62%


Future Free Cash Flow Growth Rate: 8.1%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$3.99 Stability Price (EPV)

Overvalued by 65.51%


Discount Rate: 15.0%

$0.45 NCA Price

Overvalued by 96.15%

$16.19 Book Price

Undervalued by 39.97%


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 $5.24 of cash for every $100 invested.
Figures in USD. Fiscal year ends in December
20112012201320142015
Free Cash Flow 2.60M 5.20M -2.64M 1.41M 4.75M
divided by
Invested Capital 41.59M 42.69M 48.95M 48.71M 46.23M
Cash ROIC 6.26% 12.18% -5.39% 2.89% 10.27%

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 $8.54 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in December
20112012201320142015
Net Income 2.86M 5.62M 4.99M 1.96M 1.97M
divided by
Stockholders' Equity 35.36M 39.31M 42.95M 44.70M 45.26M
Return on Equity 8.08% 14.30% 11.62% 4.38% 4.36%

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
2006200720082009201020112012201320142015
Free Cash Flow 1.48M 522,258.00 2.58M 5.84M 3.39M 2.60M 5.20M -2.64M 1.41M 4.75M

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
2006200720082009201020112012201320142015
Cash 10.04M 7.59M 5.54M 5.67M 4.31M 2.81M 4.61M 5.84M 6.19M 7.86M
Current Assets 16.89M 15.92M 14.74M 16.62M 16.84M 16.70M 19.69M 24.75M 24.15M 26.85M
Total Assets 33.00M 34.77M 34.66M 51.47M 52.06M 51.47M 53.51M 63.67M 63.42M 64.92M
Current Liabilities 3.07M 3.14M 3.65M 8.56M 8.89M 7.07M 6.21M 8.88M 8.53M 10.82M
Total Liabilities 9.27M 8.95M 8.36M 18.90M 18.41M 16.12M 14.19M 20.72M 18.72M 19.66M
Stockholder' Equity 23.73M 25.81M 26.29M 32.57M 33.65M 35.36M 39.31M 42.95M 44.70M 45.26M
Current Ratio 5.49 5.06 4.04 1.94 1.89 2.36 3.17 2.79 2.83 2.48
TL-to-TA 0.28 0.26 0.24 0.37 0.35 0.31 0.27 0.33 0.30 0.30

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
2006200720082009201020112012201320142015
Retained Earnings 17.32M 20.47M 22.38M 27.95M 31.58M 34.43M 38.90M 42.59M 44.54M 46.52M
Retained Earnings Growth - 18.20% 9.34% 24.88% 12.96% 9.04% 12.99% 9.47% 4.59% 4.43%

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 $5.81 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in December
2006200720082009201020112012201320142015
Net Income 2.90M 3.15M 1.91M 5.57M 3.62M 2.86M 5.62M 4.99M 1.96M 1.97M
divided by
Revenue 27.72M 38.73M 44.46M 58.12M 58.50M 69.97M 81.35M 97.52M 118.96M 118.59M
Net Profit Margin 10.45% 8.14% 4.30% 9.58% 6.19% 4.08% 6.91% 5.12% 1.64% 1.66%

Shrinking Pricing Power over the past 10 years

LWAY has shrinking gross margins, suggesting that they are no longer able to set prices without consideration of the cost of goods sold. As gross margins shrink, LWAY's flexibility to weather inflationary enviroments will diminish, which weakens their overall economic moat. Look at its future prospects to determine sustainability and whether the economic moat will continue to shrink or if it will rebound.

$31.48 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
2006200720082009201020112012201320142015
Gross Profit 10.64M 12.42M 12.76M 20.90M 20.18M 22.55M 27.43M 27.62M 28.86M 31.60M
divided by
Revenue 27.72M 38.73M 44.46M 58.12M 58.50M 69.97M 81.35M 97.52M 118.96M 118.59M
Gross Margin 38.38% 32.07% 28.69% 35.96% 34.49% 32.23% 33.71% 28.32% 24.26% 26.65%

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.

82.27% 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
2006200720082009201020112012201320142015
Capital Expenditure 680,174.00 1.82M 2.16M 1.77M 2.23M 1.44M 1.43M 8.48M 3.68M 2.00M
divided by
Net Income 2.90M 3.15M 1.91M 5.57M 3.62M 2.86M 5.62M 4.99M 1.96M 1.97M
Capital Expenditure Ratio 23.49% 57.88% 112.81% 31.71% 61.54% 50.40% 25.42% 169.93% 188.32% 101.17%

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
2006200720082009201020112012201320142015
Dividend Paid - - - - - - - - - -
divided by
Shares Outstanding 16.83M 16.86M 16.77M 16.80M 16.66M 16.44M 16.37M 16.35M 16.35M 16.33M
Dividend Paid Per Share - - - - - - - - - -
Price at Year End 9.35 12.29 8.94 11.95 9.64 9.64 8.12 15.16 18.52 11.04
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
2006200720082009201020112012201320142015
Shares Outstanding 16.83M 16.86M 16.77M 16.80M 16.66M 16.44M 16.37M 16.35M 16.35M 16.33M
Stock Bought Back - -0.15% 0.54% -0.20% 0.81% 1.34% 0.43% 0.17% - 0.09%
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