Lifeway Foods (LWAY) has just surpassed its medium-term key breakout point of $2.56 per share and is up by $0.26 or 10.78% to $2.66 per share! With Beyond Meat (BYND) just hitting a market cap this afternoon of $10 BILLION or 62.19X its current revenue run rate, LWAY in our opinion is a sure thing to explode from its current market cap of only $42.03 million or 0.45X its current revenue run rate!
LWAY could rapidly reach a minimum of $5-$6 per share in the days/weeks ahead as investors begin to realize it is the only other publicly traded company besides BYND that is producing a major new product line featuring a base of non-GMO pea protein! LWAY already dominates the U.S. drinkable Kefir market with an 80% market share. In the upcoming months, we expect LWAY to begin securing distribution deals with many major retailers for its new Plantiful pea protein beverages!
No matter where you live in the U.S., you can most likely purchase LWAY's Kefir products at your nearest supermarket! In the near-future, we expect the same to be true with LWAY's Plantiful. Just like Beyond Meat is the first plant-based meat to taste like real meat, Plantiful is the first probiotics beverage to taste like real dairy while being completely dairy-free, soy-free and 100% plant-based with its primary ingredient being non-GMO pea protein!
LWAY traded as high as $22.38 per share back on March 30th, 2015. At that time, LWAY had an enterprise value of $363.8 million, which valued the company at 3.06X its trailing twelve month revenues of $118.96 million. Currently at $2.66 per share, LWAY is down 88.11% from its March 2015 all-time high, even though its revenues have only declined by 16.59% to $99.22 million!
One would assume that LWAY must have seen major dilution in recent years. At LWAY's March 2015 all-time high of $22.38 per share it had 16.35 million shares outstanding. Today, LWAY only has 15.8 million shares outstanding! LWAY has actually repurchased 550,000 shares in recent years!
In that case, one would assume that LWAY must have gotten itself deeply into debt in recent years. At LWAY's March 2015 all-time high of $22.38 per share it had $8.997 million in debt. Today, LWAY only has $4.671 million in debt! LWAY has actually repaid $4.326 million in debt in recent years, which includes $1.33 million in debt that LWAY repaid in 1Q 2019! LWAY reduced its debt by 22% last quarter and has reduced its debt by 48% since March 2015!
LWAY's 1Q 2019 revenues grew sequentially by 6.87% from 4Q 2018 to $24.61 million! Meanwhile, LWAY's gross margins saw a significant improvement! LWAY's 1Q 2019 gross profit grew sequentially by 23.71% to $6.303 million!
LWAY's current enterprise value/revenue ratio is only 0.45. Historically, LWAY's enterprise value/revenue ratio has always returned to its trailing 3-year median, which is currently 1.112. We expect LWAY's enterprise value/revenue ratio to return to its trailing 3-year median of 1.112 in the short-term, which would currently value LWAY at $6.85 per share!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA has purchased 10,000 shares of LWAY and intends to sell for a profit in the future. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.
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