Electromedical & Electrotherapeutic Apparatus
LivaNova PLC, a medical device company, designs, develops, manufactures, and sells therapeutic solutions worldwide. It operates through three segments: Cardiopulmonary, Neuromodulation, and Advanced Circulatory Support. The Cardiopulmonary segment develops, produces, and sells cardiopulmonary products, including oxygenators, heart-lung machines, autotransfusion systems, perfusion tubing systems, cannulae, connect, and other related products. The Neuromodulation segment designs, develops, and markets VNS Therapy System, an implantable device that delivers vagus nerve stimulation (VNS) therapy for the treatment of drug-resistant epilepsy, difficult-to-treat depression, and obstructive sleep apnea. It is also involved in the development and clinical testing of the VITARIA System for treating heart failure through VNS. The Advanced Circulatory Support segment develops, produces, and sells temporary life support products. It serves perfusionists, neurologists, neurosurgeons, and other physicians, as well as hospitals, other medical institutions, and healthcare providers. The company sells its products through direct sales representatives and independent distributors. It also engages in research collaboration with Verily to capture clinical biomarkers of depression. LivaNova PLC was founded in 1987 and is headquartered in London, the United Kingdom.
Discounted Cash Flow Valuation of Livanova Plc
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $30.44M | $27.6M | $25.02M | $22.68M | $20.57M | $18.64M | $16.9M | $15.32M | $13.89M | $12.59M | $11.42M | $114.2M |
DCF | $24M | $18.92M | $14.92M | $11.76M | $9.27M | $7.308M | $5.761M | $4.541M | $3.58M | $2.822M | $28.22M | |
Value | $131.1M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|
Net Margin | -5.2% | -2.5% | -17% | -14% | -37% | -13% | -8.4% | 1.5% | -2.7% |
ROA | 1.5% | 5.1% | -9.3% | -7% | -11% | -0.036% | -1.2% | -0.92% | -1.2% |
ROE | -3.7% | -1.4% | -13% | -11% | -31% | -10% | -7.1% | 1.4% | -2.6% |
The average Net Margin over the past 5 years is -14.73%.
The trend of Net Margin over the past 5 years is +3.85%.
The average ROA over the past 5 years is -4.94%.
The trend of ROA over the past 5 years is +2.02%.
The average ROE over the past 5 years is -11.82%.
The trend of ROE over the past 5 years is +2.93%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM | |
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Debt FCF | 3.18 | 3.00 | 2.32 | -3.56 | -6.69 | 6.86 | 14.27 | 16.10 | 21.14 | |
Debt Equity | 0.10 | 0.09 | 0.13 | 0.30 | 0.68 | 0.41 | 0.51 | 0.50 | 0.53 | |
MIN | ||||||||||
Graham Stability | - | - | - | - | - | - | - | - | - |
The Debt/FCF trailing twelve month is 21.14.
The trend of Debt/FCF over the past 5 years is 3.88.
Graham’s Stability measure stands at -.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
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Revenue | -0.73% | 0.83% | 7.3% | 13% | 2.9% |
Net Income | - | - | - | - | - |
Stockholders Equity | -4.1% | -3.2% | 4.5% | 5.8% | 1.5% |
FCF | -4.1% | -14% | - | -8% | -8.4% |
The Revenue CAGR over the past 5 years is +0.83%.
The trend of Revenue growth rate over the past 5 years is +2.86%.
The Earnings CAGR over the past 5 years is -.
The trend of Earnings growth rate over the past 5 years is -.
The Equity CAGR over the past 5 years is -3.21%.
The trend of Equity growth rate over the past 5 years is +1.53%.
The FCF CAGR over the past 5 years is -13.51%.
The trend of FCF growth rate over the past 5 years is -8.44%.