Lakeland Industries Inc (NASDAQ: LAKE)

Sector: Consumer Cyclical Industry: Apparel Manufacturing CIK: 0000798081
Market Cap 74.57 Mn
P/B 0.55
P/E -1.99
P/S 0.39
ROIC (Qtr) -77.80
Div Yield % 1.70
Rev 1y % (Qtr) 3.99
Total Debt (Qtr) 52.21 Mn
Debt/Equity (Qtr) 0.39

About

Lakeland Industries Inc., a prominent name in the personal protective equipment (PPE) industry, is publicly traded on the NASDAQ stock exchange under the symbol "LAKE." The company's primary business activities revolve around the design, manufacturing, and distribution of high-quality safety products that protect individuals from hazardous environments across various industries. These industries include chemical, clean room, energy, fire service, manufacturing, and utility applications. With a global footprint spanning seven reportable geographic...

Read more

Price action

Investment thesis

Bull case

  • Healthy cash reserves of 17.19M provide 3.40x coverage of short-term debt 5.05M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 171.01M provides 3.28x coverage of total debt 52.21M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of (16.16M) exceeds capital expenditure of (4.81M) by 3.36x, indicating strong organic growth funding capability.
  • Free cash flow of (16.16M) provides excellent 14.95x coverage of dividends (1.08M), indicating sustainable shareholder returns.
  • Tangible assets of 171.01M provide robust 9.57x coverage of other current liabilities 17.87M, indicating strong asset backing.

Bear case

  • Operating cash flow of (20.98M) barely covers its investment activities of (23.65M), with a coverage ratio of 0.89, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 17.19M against inventory of 87.89M, the 0.20 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Cash reserves of 17.19M provide limited coverage of acquisition spending of (28.30M), which is -0.61x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of (20.98M) shows concerning coverage of stock compensation expenses of 3.50M, with a -6 ratio indicating potential earnings quality issues.
  • Operating cash flow of (20.98M) provides minimal -3.06x coverage of tax expenses of 6.86M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Apparel Manufacturing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 RL Ralph Lauren Corp 21.81 Bn 25.53 2.88 2.85 Bn
2 GIL Gildan Activewear Inc. 9.45 Bn 19.89 2.81 1.87 Bn
3 LEVI Levi Strauss & Co 8.22 Bn 13.64 1.29 2.29 Bn
4 VFC V F Corp 7.10 Bn 78.61 0.74 5.79 Bn
5 KTB Kontoor Brands, Inc. 3.40 Bn 15.62 1.20 1.50 Bn
6 PVH Pvh Corp. /De/ 3.39 Bn 9.96 0.38 4.26 Bn
7 COLM Columbia Sportswear Co 3.12 Bn 16.69 0.91 0.48 Bn
8 ZGN Ermenegildo Zegna N.V. 2.55 Bn 43.66 1.13 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.45 1.01
EV to Cash from Ops. EV/CFO -4.73 8.80
EV to Debt EV to Debt 1.90 4.30
EV to EBIT EV/EBIT -3.48 -5.31
EV to EBITDA EV/EBITDA -5.82 -69.89
EV to Free Cash Flow [EV/FCF] EV/FCF -6.14 15.55
EV to Market Cap EV to Market Cap 1.33 1.81
EV to Revenue EV/Rev 0.51 1.14
Price to Book Value [P/B] P/B 0.55 1.78
Price to Earnings [P/E] P/E -1.99 14.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -34.73 -1.16
Dividend Payout Ratio % Div Payout % (Qtr) -2.70 -3.95
Dividend per Basic Share Div per Share (Qtr) 0.12 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -7.24 20.82
Interest Coverage Int. cover (Qtr) -13.28 26.98
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 91.75 -10.62
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 8.55 10.71
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.94
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -2,258.97 -88.95
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -1,144.12 11.99
EBIT Growth (1y) % EBIT 1y % (Qtr) -1,672.07 -49.71
EBT Growth (1y) % EBT 1y % (Qtr) -4,174.50 -181.63
EPS Growth (1y) % EPS 1y % (Qtr) -4,844.44 -218.58
FCF Growth (1y) % FCF 1y % (Qtr) -137.53 -29.63
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.98 6.94
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 1.16
Cash Payout Ratio Cash Payout (Qtr) -0.04 0.15
Cash Ratio Cash Ratio (Qtr) 0.46 0.28
Current Ratio Curr Ratio (Qtr) 3.83 1.99
Debt to Equity Ratio Debt/Equity (Qtr) 0.39 -1.63
Interest Cover Ratio Int Coverage (Qtr) -13.28 26.98
Times Interest Earned Times Interest Earned (Qtr) -13.28 26.98
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -12.70 -6.73
EBIT Margin % EBIT Margin % (Qtr) -14.75 -10.67
EBT Margin % EBT Margin % (Qtr) -15.86 -17.44
Gross Margin % Gross Margin % (Qtr) 34.80 49.34
Net Profit Margin % Net Margin % (Qtr) -19.40 -18.93