DCF Tool

LCI

Lannett Co., Inc. – Pharmaceutical Preparation Manufacturing
Lannett Company, founded in 1942, develops, manufactures, packages, markets and distributes generic pharmaceutical products for a wide range of medical indications.
Analysis Results
Intrinsic Value $9.55
Latest Price $0.45
Relative Value 95% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of -9.9%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 9.4%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of -9.9%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2023 48.0 43.9
2024 43.2 36.2
2025 39.0 29.8
2026 35.1 24.5
2027 31.6 20.2
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 437 million. This corresponds to a present value of 256 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 155 million. Adding in the terminal value gives a total present value of 410 million.

There are presently 43.0 million outstanding shares, so the intrinsic value per share is 9.55.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 290,116,000
Current Cash 87,854,000
Current Liabilities 104,940,000
Current Debt 0
Non-Cash Working Capital (NCWC) 97,322,000
Change in NCWC -72,486,000
EBIT -70,219,000
Tax Provision -2,304,000
Depreciation and Amortization 34,267,000
Capital Expenditure -10,489,000
Unlevered Free Cash Flow -118,927,000
Current Assets 353,563,000
Current Cash 93,286,000
Current Liabilities 90,469,000
Current Debt 0
Non-Cash Working Capital (NCWC) 169,808,000
Change in NCWC -2,395,000
EBIT -16,658,000
Tax Provision 60,625,000
Depreciation and Amortization 47,824,000
Capital Expenditure -14,915,000
Unlevered Free Cash Flow 13,856,000
Current Assets 443,208,000
Current Cash 144,329,000
Current Liabilities 214,865,000
Current Debt 88,189,000
Non-Cash Working Capital (NCWC) 172,203,000
Change in NCWC -50,020,000
EBIT 55,775,000
Tax Provision -15,262,000
Depreciation and Amortization 56,309,000
Capital Expenditure -47,130,000
Unlevered Free Cash Flow 14,934,000
Current Assets 472,249,000
Current Cash 140,249,000
Current Liabilities 176,622,000
Current Debt 66,845,000
Non-Cash Working Capital (NCWC) 222,223,000
Change in NCWC -71,989,000
EBIT 117,155,000
Tax Provision -74,138,000
Depreciation and Amortization 55,594,000
Capital Expenditure -27,340,000
Unlevered Free Cash Flow 73,420,000
Current Assets 526,870,000
Current Cash 98,586,000
Current Liabilities 200,917,000
Current Debt 66,845,000
Non-Cash Working Capital (NCWC) 294,212,000
Change in NCWC 47,433,000
EBIT 177,314,000
Tax Provision 22,403,000
Depreciation and Amortization 55,115,000
Capital Expenditure -71,354,000
Unlevered Free Cash Flow 130,760,254
Current Assets 523,698,000
Current Cash 144,828,000
Current Liabilities 192,208,000
Current Debt 60,117,000
Non-Cash Working Capital (NCWC) 246,779,000
Change in NCWC 1,260,000
EBIT 185,663,000
Tax Provision 1,097,000
Depreciation and Amortization 55,340,000
Capital Expenditure -48,694,000
Unlevered Free Cash Flow 192,472,000
Current Assets 612,815,000
Current Cash 238,863,000
Current Liabilities 306,669,000
Current Debt 178,236,000
Non-Cash Working Capital (NCWC) 245,519,000
Change in NCWC 132,771,000
EBIT 196,712,000
Tax Provision 17,322,000
Depreciation and Amortization 33,433,000
Capital Expenditure -24,267,000
Unlevered Free Cash Flow 283,848,419
Current Assets 370,546,000
Current Cash 213,807,000
Current Liabilities 44,126,000
Current Debt 135,000
Non-Cash Working Capital (NCWC) 112,748,000
Change in NCWC 40,351,000
EBIT 226,487,000
Tax Provision 77,430,000
Depreciation and Amortization 5,583,000
Capital Expenditure -31,976,000
Unlevered Free Cash Flow 163,333,337
Current Assets 265,547,000
Current Cash 146,280,000
Current Liabilities 46,999,000
Current Debt 129,000
Non-Cash Working Capital (NCWC) 72,397,000
Change in NCWC 39,847,000
EBIT 108,189,000
Tax Provision 32,857,000
Depreciation and Amortization 5,984,000
Capital Expenditure -26,082,000
Unlevered Free Cash Flow 88,449,375
Current Assets 116,129,000
Current Cash 51,150,000
Current Liabilities 33,099,000
Current Debt 670,000
Non-Cash Working Capital (NCWC) 32,550,000
Change in NCWC -4,958,000
EBIT 18,757,000
Tax Provision 7,303,000
Depreciation and Amortization 6,198,000
Capital Expenditure -7,788,000
Unlevered Free Cash Flow 5,586,695

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