LifeVantage (LFVN) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for LifeVantage (LFVN) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Stock Price Target: $11.03
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for LifeVantage in comparison to the Household Products industry and the S&P 500.
LifeVantage is a Micro Cap company with a Market Cap of $85.6M.
How are investors using LifeVantage earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for LifeVantage is 28.73%, in comparison to 3.50% for the S&P 500 and 1.35% for the 10-year treasury bond. The median earnings yield for the Household Products industry is 5.19%.
What does LifeVantage Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
LifeVantage is currently trading at a P/E of 6.56. The P/E for the Household Products industry is 35.27 and the P/E for the S&P 500 is 28.94.
What is the current Price-to-Sales Ratio (P/S) for LifeVantage?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
LifeVantage is currently trading at a P/S of 0.41. The P/S for the Household Products industry is 3.70 and the P/S for the S&P 500 is 3.14.
How does LifeVantage Price-to-BookRatio (P/B) compare to the Household Products industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
LifeVantage P/B ratio is 2.39. The P/B for the Household Products industry is 9.06 and the P/B for the S&P 500 is 4.74.
How attractive is LifeVantage Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
LifeVantage ROIC is currently 27.54% in comparison to 17.13% for the Household Products industry and 8.60% for the S&P 500.
What is LifeVantage YTD Performance in comparison to its industry and the total market?
The year-to-date (YTD) performance is the amount of profit/loss realized by a stock since the first trading day of the current calendar year.
The YTD performance for LifeVantage is -34.01%. The Household Products industry has a YTD performance of 25.96% in comparison to the YTD S&P 500 performance of 22.34%.
Recent Financial Results
- Revenue of $53.2M, a decrease of 2.9% from the prior year period
- Total active accounts declined 4.7% to 164,000 as growth of 8.9% in Asia/Pacific & Europe was more than offset by declines of 9.4% in the Americas
- Earnings per diluted share of $0.25, up 47.1%
- Adjusted earnings per diluted share were $0.23, down 8.0%
- Adjusted EBITDA of $5.8M, a decrease of 13.7%
- Repurchased approximately 0.5M shares of stock
- Cash and cash equivalents of $19.9M and no debt
Stock Price Target: $11.03
LifeVantage Corporation develops and distributes nutrigenomic activators, dietary supplements, nootropics and other weight management products.
It sells its products through its website, as well as through a network of independent distributors in the US and several countries internationally. LifeVantage is headquartered in Lehi, Utah and the current CEO is Steven Fife.
This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.