Barrington analyst Michael Petusky has maintained their neutral stance on LFCR stock, giving a Hold rating on November 7.
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Michael Petusky has given his Hold rating due to a combination of factors related to Lifecore Biomedical’s financial and operational performance. The company reported a solid third quarter with revenue growth, particularly in the hyaluronic acid manufacturing segment, and improved adjusted EBITDA compared to the previous year. However, the adjusted EBITDA fell short of expectations, and the company reported a larger-than-expected loss per share.
Despite the operational progress and new program signings, Lifecore’s significant leverage, with over 8x debt, remains a concern. The company’s valuation and financial metrics suggest that while it is building credibility and making strides operationally, a more favorable entry point for investment might be preferable. Consequently, the Hold rating reflects a cautious approach, acknowledging the progress while considering the financial risks involved.