LivaNova PLC (NASDAQ: LIVN)

Sector: Healthcare Industry: Medical Devices CIK: 0001639691
Market Cap 3.65 Bn
P/B 3.15
P/E -16.78
P/S 2.71
ROIC (Qtr) 9.48
Div Yield % 0.00
Rev 1y % (Qtr) 12.46
Total Debt (Qtr) 477.55 Mn
Debt/Equity (Qtr) 0.41
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About

LivaNova PLC, a prominent player in the medical technology industry, is a global company that operates under the ticker symbol LIVN. It is dedicated to creating products and therapies that bring about life-altering improvements for patients. The company's operations span across three reportable segments: Cardiopulmonary, Neuromodulation, and Advanced Circulatory Support (ACS). LivaNova's offerings are utilized in the treatment of a variety of conditions, such as heart failure, epilepsy, depression, and obstructive sleep apnea, and are marketed in...

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Investment thesis

Bull case

  • Strong operating cash flow of 250.65M provides robust 0.52x coverage of total debt 477.55M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 646.08M provide 7.56x coverage of short-term debt 85.44M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.53B provides 3.21x coverage of total debt 477.55M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 191.43M exceeds capital expenditure of 59.22M by 3.23x, indicating strong organic growth funding capability.
  • Operating cash flow of 250.65M fully covers other non-current liabilities 180.66M by 1.39x, showing strong long-term stability.

Bear case

  • Operating cash flow of 250.65M barely covers its investment activities of (53.36M), with a coverage ratio of -4.70, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (53.36M) provide weak support for R&D spending of 176.95M, which is -0.30x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating earnings of (137.78M) show weak coverage of depreciation charges of 57.51M, with a -2.40 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 191.43M represents just -0.87x of debt issuance (221.19M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Retained earnings of (1.18B) provide limited buffer against comprehensive income items of 5.51M, which is -213.62x, indicating elevated exposure to market risks.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Medical Devices
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ABT Abbott Laboratories 173.80 Bn 32.73 5.47 12.94 Bn
2 SYK Stryker Corp 141.15 Bn 43.48 5.62 15.86 Bn
3 MDT Medtronic plc 123.47 Bn 25.92 3.55 29.10 Bn
4 BSX Boston Scientific Corp 112.80 Bn 38.92 5.62 11.44 Bn
5 EW Edwards Lifesciences Corp 45.66 Bn 33.38 7.76 0.70 Bn
6 DXCM Dexcom Inc 27.52 Bn 32.91 5.90 1.34 Bn
7 STE STERIS plc 24.13 Bn 34.08 4.14 2.05 Bn
8 PODD Insulet Corp 17.33 Bn 70.38 6.87 1.01 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.38 2.13
EV to Cash from Ops. EV/CFO 14.08 2.75
EV to Debt EV to Debt 7.39 17.25
EV to EBIT EV/EBIT -25.62 2.89
EV to EBITDA EV/EBITDA 14.04 4.53
EV to Free Cash Flow [EV/FCF] EV/FCF 18.44 29.36
EV to Market Cap EV to Market Cap 0.97 25.09
EV to Revenue EV/Rev 2.62 32.80
Price to Book Value [P/B] P/B 3.15 4.73
Price to Earnings [P/E] P/E -16.78 -2.04
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 40.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 1.59
Dividend per Basic Share Div per Share (Qtr) 0.00 0.10
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -0.37
Interest Coverage Int. cover (Qtr) -2.54 196.93
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -19.35 -152.08
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -3.07 8,476.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 -0.44
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -97,286.50 -792.16
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 329.82 3.79
EBIT Growth (1y) % EBIT 1y % (Qtr) -32,672.10 -301.80
EBT Growth (1y) % EBT 1y % (Qtr) -207.16 -121.44
EPS Growth (1y) % EPS 1y % (Qtr) -1,006.82 -87.51
FCF Growth (1y) % FCF 1y % (Qtr) 76.16 10.43
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.86 38.21
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.53 0.55
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.78 1.80
Current Ratio Curr Ratio (Qtr) 1.33 4.18
Debt to Equity Ratio Debt/Equity (Qtr) 0.41 1.20
Interest Cover Ratio Int Coverage (Qtr) -2.54 196.93
Times Interest Earned Times Interest Earned (Qtr) -2.54 196.93
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -6.00 -2,396.63
EBIT Margin % EBIT Margin % (Qtr) -10.21 -2,478.60
EBT Margin % EBT Margin % (Qtr) -14.23 -2,690.42
Gross Margin % Gross Margin % (Qtr) 68.50 30.80
Net Profit Margin % Net Margin % (Qtr) -16.10 -2,821.53