Lifecore Biomedical (LFCR) AI Stock Analysis

• Market Cap: $230.67M
• Dividend Yield: N/A
• Average Volume (3M): 281.62K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.77
• Revenue Growth: 6.88%
• EPS Growth: -17.54%
• Country: US
• Employees: 524
• Sector: Healthcare
• Sector Strength: 74
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -1.48
• Shares Outstanding: 37,025,330
• 10 Day Avg. Volume: 499,378
• 30 Day Avg. Volume: 281,620
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 1.85
• Price to Cash Flow (P/CF): -9.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $10.00
• Price Target Upside: 74.83% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Lifecore Biomedical's overall stock score reflects its challenging financial position marked by high leverage and negative equity, alongside a concerning valuation due to negative earnings. While some technical indicators suggest stability, and strategic advancements are promising, the overall outlook remains cautious due to ongoing profitability and operational challenges.

Positive Factors

Business Development

The company continues to work on dozens of new business development opportunities, which include significant multinational pharmaceutical representation, a marked improvement from the company’s historical pipeline.

Financial Performance

Lifecore Biomedical, Inc. delivered a generally solid third quarter result, which included better-than-expected performance in terms of adjusted EBITDA.

Operational Efficiency

The sale of Lifecore's excess capital equipment is seen as a smart move because it provides $17 million in cash and enhances financial flexibility.

Negative Factors

Cash Flow

Free cash flow for the year is expected to be negative, though it is projected to break-even in the future.

Debt and Leverage

Lifecore has a highly leveraged balance sheet with approximately $180.1 million in debt and $44.3 million in convertible preferred stock.

Valuation Concerns

A premium valuation still seems inappropriate due to leverage and valuation concerns.

Lifecore Biomedical Business Overview & Revenue Model

Company Description

Lifecore Biomedical, Inc., together with its subsidiaries, operates as an integrated contract development and manufacturing organization in the United States and internationally. It operates through Lifecore, Curation Foods, and Other segments. The Lifecore segment engages in the manufacture of pharmaceutical-grade sodium hyaluronate (HA) in bulk form, as well as formulated and filled syringes and vials for injectable products used in treating a range of medical conditions and procedures. It also provides services, including technology development, material component changes, analytical method development, formulation development, pilot studies, stability studies, process validation, and production of materials for clinical studies to its partners for HA-based and non-HA based aseptically formulated and filled products. This segment sells its non-HA products for medical use primarily in the ophthalmic, orthopedic, and other markets. The Curation Foods segment engages in processing, marketing, and selling of olive oils and wine vinegars under the O brand; and guacamole and avocado food products under the Yucatan and Cabo Fresh brands, as well as various private labels. The company was formerly known as Landec Corporation and changed its name to Lifecore Biomedical, Inc. in November 2022. Lifecore Biomedical, Inc. was incorporated in 1986 and is headquartered in Santa Maria, California.

How the Company Makes Money

Lifecore Biomedical makes money primarily through the development and manufacturing of pharmaceutical products, particularly those based on hyaluronic acid. The company generates revenue by partnering with pharmaceutical and medical device companies to provide contract development and manufacturing services. These partnerships often involve the formulation, aseptic filling, and packaging of injectable pharmaceutical products. Additionally, Lifecore may receive milestone payments and royalties from its partners based on the commercial success of the products it helps to develop and manufacture. The company's expertise in producing complex formulations and its ability to meet stringent regulatory standards are key factors that contribute to its revenue generation.

Lifecore Biomedical Financial Statement Overview

Summary

Lifecore Biomedical is facing financial challenges with declining revenues, profitability, and negative cash flows. High leverage and decreasing equity suggest potential financial instability, while operational inefficiencies limit cash generation, raising concerns about future sustainability.

Income Statement

The company shows a significant decline in revenue and profitability over the years. The TTM data indicates negative EBIT and net income, demonstrating operational challenges and inefficiencies. Although there was a slight revenue increase from the previous year, the overall trend is concerning with declining gross and net profit margins.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, indicating potential financial risk. The equity ratio is low, showing reliance on debt financing. Positive stockholders' equity, however, has decreased substantially, signaling potential solvency issues.

Cash Flow

The cash flow statement shows negative free cash flow and limited operating cash flow, indicating cash management issues. A low operating cash flow to net income ratio highlights inefficiencies in converting revenue into cash, raising concerns about liquidity.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
130.31M	128.26M	103.27M	185.79M	544.16M	590.37M
	Gross Profit
43.59M	41.85M	27.29M	50.55M	81.47M	74.99M
	EBIT
-25.43M	9.33M	-26.08M	3.46M	-6.86M	-8.30M
	EBITDA
-18.54M	35.60M	-35.98M	1.96M	13.00M	-7.16M
	Net Income Common Stockholders
-44.65M	12.01M	-102.19M	-46.08M	-32.66M	-38.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.42M	8.46M	19.09M	1.64M	1.29M	360.00K
	Total Assets
237.69M	273.70M	255.15M	295.44M	502.92M	541.31M
	Total Debt
5.40M	130.36M	112.74M	153.09M	221.40M	221.12M
	Net Debt
-15.00K	121.90M	93.65M	151.45M	220.11M	220.76M
	Total Liabilities
190.27M	219.80M	256.99M	187.30M	300.14M	310.27M
	Stockholders Equity
2.23M	53.90M	-1.84M	108.14M	202.78M	231.04M
Cash Flow		Free Cash Flow
-10.74M	-18.14M	-55.22M	-52.53M	-8.75M	-43.73M
	Operating Cash Flow
3.21M	-217.00K	-34.46M	-24.40M	15.02M	-17.04M
	Investing Cash Flow
-6.96M	-17.92M	-4.15M	81.77M	-10.86M	-23.89M
	Financing Cash Flow
6.09M	7.51M	39.70M	-57.02M	-3.42M	40.02M

Lifecore Biomedical Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.72
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LFCR, the sentiment is Negative. The current price of 5.72 is below the 20-day moving average (MA) of 6.42, below the 50-day MA of 6.14, and below the 200-day MA of 5.92, indicating a bearish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 71.16 is Negative, neither overbought nor oversold. The STOCH value of 83.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LFCR.

Lifecore Biomedical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABT	79 Outperform	$220.33B	16.63	30.95%	1.76%	4.59%	134.50%
MDT	77 Outperform	$109.38B	25.92	8.42%	3.28%	2.72%	4.48%
BDX	76 Outperform	$60.11B	34.78	6.92%	1.90%	5.89%	42.05%
HAE	70 Outperform	$3.07B	24.02	14.06%	―	8.14%	2.55%
LFCR	49 Neutral	$230.67M	―	-83.58%	―	6.88%	-17.54%
BAX	49 Neutral	$15.77B	136.07	-9.24%	2.99%	-14.00%	-184.82%
Sector *	48 Neutral	$6.36B	1.28	-45.04%	2.64%	19.24%	1.69%

Lifecore Biomedical Corporate Events

Lifecore Biomedical Strengthens Financial Position with Key Moves

Lifecore Biomedical, Inc. has strategically amended its asset-based lending revolving credit facility with BMO, extending the term by three years to 2027 and reducing interest rates. This move, alongside a recent $24.3 million private placement, significantly strengthens Lifecore’s financial position and supports its growth strategy in the expanding CDMO market. The company is enhancing its capabilities with new management, advanced manufacturing equipment, and new customer agreements.

Lifecore Biomedical Plans Strategic Growth and Transformation

Lifecore Biomedical, Inc., a leader in complex injectables, is poised for sustainable growth with a strategic plan to achieve over 12% revenue CAGR and 25%+ EBITDA margins. The company is leveraging its robust capabilities and experienced management team to capitalize on market opportunities, aiming to support $300 million in annual revenue. Lifecore’s transformation into a standalone CDMO with enhanced technical and regulatory strengths positions it as a compelling player in the financial markets.