Lifecore Biomedical (LFCR) AI Stock Analysis

• Market Cap: $303.24M
• Dividend Yield: N/A
• Average Volume (3M): 213.34K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.86
• Revenue Growth: 6.88%
• EPS Growth: -17.54%
• Country: US
• Employees: 524
• Sector: Healthcare
• Sector Strength: 42
• Industry: Drug Manufacturers - Specialty & Generic
• EPS (TTM): -0.47
• Shares Outstanding: 37,025,330
• 10 Day Avg. Volume: 168,980
• 30 Day Avg. Volume: 213,338
• PEG Ratio: -0.02
• Price to Book (P/B): -129.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -4.31
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 0.64
• Enterprise Value/Gross Profit: 7.61
• Enterprise Value/Ebitda: -26.11
• 1Y Price Target: $9.00
• Price Target Upside: 9.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 51 Neutral
• Price Target: $8.50 ▲(3.79%Upside)

Lifecore Biomedical's overall score is impacted primarily by its challenging financial situation, characterized by high leverage and profitability issues. While technical indicators are positive, suggesting short-term momentum, valuation concerns due to negative profitability weigh heavily. The earnings call provides some optimism with strategic advancements, yet immediate financial challenges remain a risk.

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

Minimum volume commitments from Alcon represent a solid foundation for Lifecore’s achievable midterm revenue guide.

Negative Factors

Debt Levels

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

Regulatory Risks

Lifecore could face quality-assurance problems with the FDA or another regulator.

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 its contract development and manufacturing services, which involve producing injectable-grade hyaluronic acid and related biomaterials for its clients, including pharmaceutical and medical device companies. The company generates revenue by leveraging its expertise in fermentation and aseptic processing to manufacture products under strict regulatory compliance for its clients. Significant partnerships with these companies contribute to its earnings, as Lifecore's specialized capabilities and high-quality production processes are crucial for its clients' product development and commercialization needs.

Lifecore Biomedical Financial Statement Overview

Summary

Lifecore Biomedical faces significant financial challenges. Despite modest revenue growth, the company struggles with profitability, high leverage, and negative equity. Cash flow improvements are a positive aspect but insufficient to address broader financial weaknesses.

Income Statement

Lifecore Biomedical's TTM revenue shows modest growth over the previous year, but profitability remains a concern. The company exhibits a negative EBIT and net profit margin, indicating operational challenges. Despite a slight revenue increase, the negative margins highlight potential inefficiencies or cost management issues.

Balance Sheet

The balance sheet reflects high leverage with a substantial debt-to-equity ratio, exacerbated by negative equity in the TTM period. The company's liabilities surpass assets, posing significant financial risks and limiting financial flexibility. The return on equity is not meaningful due to negative equity, which is a red flag for potential investors.

Cash Flow

While Lifecore Biomedical's operating cash flow has improved in the TTM period, the free cash flow remains negative due to high capital expenditures. The operating cash flow to net income ratio is positive, indicating some operational cash generation despite net losses. However, the persistent negative free cash flow suggests ongoing capital strain.

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
EBITDA	-10.99M	35.60M	-35.98M	1.96M	13.00M	-7.16M
Net Income	-44.65M	12.01M	-102.19M	-46.08M	-32.66M	-38.19M
Balance Sheet
Total Assets	237.69M	273.70M	255.15M	295.44M	502.92M	541.31M
Cash, Cash Equivalents and Short-Term Investments	5.42M	8.46M	19.09M	1.64M	1.29M	360.00K
Total Debt	130.34M	130.36M	112.74M	153.09M	221.40M	221.12M
Total Liabilities	235.46M	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: Positive
• Last Price: 8.19
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 8.19 is above the 20-day moving average (MA) of 7.13, above the 50-day MA of 6.86, and above the 200-day MA of 6.33, indicating a bullish trend. The MACD of 0.35 indicates Negative momentum. The RSI at 72.66 is Negative, neither overbought nor oversold. The STOCH value of 83.96 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LFCR.

Lifecore Biomedical Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBS	54 Neutral	$344.66M	―	-21.63%	―	-18.56%	76.88%
DERM	54 Neutral	$166.33M	―	-48.14%	―	-29.69%	-105.88%
AQST	53 Neutral	$322.82M	―	77.48%	―	5.29%	-37.31%
Sector *	51 Neutral	$7.41B	0.36	-61.88%	2.33%	16.99%	1.69%
LFCR	51 Neutral	$303.24M	―	-83.58%	―	6.88%	-17.54%
ESPR	50 Neutral	$196.93M	―	23.44%	―	12.99%	17.78%
TKNO	45 Neutral	$273.08M	―	-28.76%	―	3.79%	55.19%

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.