One-glance verdict
Within fair range
$13.09 our estimate vs market $24.58
Wall Street consensus: $33.00 (152.1% higher than our fair-value estimate)
88% above our estimate
Fundamentals snapshot
Lifeway Foods, Inc.
LWAY · NGM · Consumer Defensive · Packaged Foods
Current price
$24.58
52-week range
$17.31 - $34.20
Market cap
$371.32M
Balance sheet
Healthy
210.03x Strong cushion
Net debt $15.38M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 14.1% last year.
- Reward Returns 13.3% on equity, ahead of 75% of its peers.
- Reward Free cash flow was positive in 7/10 years.
- Risk Operating margin compressed from 1.7% to 0.9% over 3 years.
What this company does
Lifeway Foods, Inc.
Lifeway Foods primarily sells health-focused dairy products, with most of its revenue coming from a yogurt-like drink called kefir. The company makes money by selling these items in grocery stores under its own brands and also by making them for stores to sell under their own private labels (a store's own brand, like Great Value for Walmart). Lifeway's success depends on the growing consumer trend for healthy foods and its ability to manage its supply chain (the entire process of getting ingredients, making the product, and delivering it to stores) efficiently.
How the company got here
Lifeway Foods was started in 1986 in the basement of Michael and Ludmila Smolyansky, immigrants from Kyiv, Ukraine. They wanted to bring kefir, a fermented dairy drink popular in Eastern Europe, to the United States. The company went public (meaning its shares became available for anyone to buy on the stock market) just two years later. After Michael's death in 2002, his daughter Julie Smolyansky took over, becoming the youngest female CEO of a publicly traded company at the time.
What it actually does
Lifeway makes and sells food products that contain probiotics (live bacteria that are good for your digestive system). Their main product is kefir, a drinkable, yogurt-like smoothie that is tart and tangy. They also produce other dairy items like a soft, European-style farmer cheese and ProBugs, a line of kefir products in squeezable pouches designed for children. You can find their products in grocery stores, usually under the Lifeway brand name, but they also produce items for stores to sell under their own private labels.
Drinkable Kefir
This is the company's core business and makes up the vast majority of its sales. Kefir is a cultured milk smoothie that is high in protein and calcium and contains live and active probiotic cultures. Lifeway sells this flagship product in many different flavors, sizes, and milk types, including low-fat, whole milk, and organic options. Shoppers buy these products at grocery stores, club stores, and mass merchandisers to drink as a healthy beverage or snack.
Farmer Cheese and Other Products
While a smaller part of the business, this segment is a key area of growth. The main product here is Lifeway Farmer Cheese, a soft, probiotic-rich cheese that is positioned as a healthy alternative to cottage cheese. The company also offers other items like ProBugs, which are kefir drinks packaged in kid-friendly pouches. These products are sold through the same grocery and retail channels, helping the company reach more customers and get more shelf space.
What management is betting on now
The company's current strategy focuses on increasing the distribution (the number of stores and channels where products are sold) of its main kefir and farmer cheese products. They are also investing in product innovation, creating new items like 'Muscle Mates,' a drink with added protein and creatine, to appeal to new types of health-conscious consumers. A major priority is expanding their manufacturing capacity (the amount of product they can make) to keep up with growing demand. Management is also increasing its marketing efforts to build brand awareness and educate more people about the health benefits of probiotics and kefir.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$5.91M
FY2024 Q4
$-3.83M
FY2025 Q1
$-2.37M
FY2025 Q2
$1.60M
FY2025 Q3
$5.58M
FY2025 Q4
$-17.42M
FY2026 Q1
$-6.66M
FY2026 Q2
$-8.80M
Revenue
$66.89M
Net income
$127.00K
Diluted EPS
0.01
Operating cash flow
$-339.00K
Free cash flow
$-8.80M
Fetching…
Sources
Revenue
$63.01M
Net income
$4.67M
Diluted EPS
0.30
Operating cash flow
$4.38M
Free cash flow
$-6.66M
Fetching…
Sources
Revenue
$55.36M
Net income
$2.54M
Diluted EPS
0.15
Operating cash flow
$267.00K
Free cash flow
$-17.42M
Fetching…
Sources
Revenue
$57.14M
Net income
$3.53M
Diluted EPS
0.23
Operating cash flow
$6.92M
Free cash flow
$5.58M
Fetching…
Sources
Revenue
$53.90M
Net income
$4.25M
Diluted EPS
0.28
Operating cash flow
$3.91M
Free cash flow
$1.60M
Fetching…
Sources
Revenue
$46.09M
Net income
$3.54M
Diluted EPS
0.23
Operating cash flow
$-150.00K
Free cash flow
$-2.37M
Fetching…
Sources
Revenue
$46.93M
Net income
$-160.00K
Diluted EPS
-0.00
Operating cash flow
$-2.58M
Free cash flow
$-3.83M
Fetching…
Sources
Revenue
$46.09M
Net income
$2.98M
Diluted EPS
0.19
Operating cash flow
$7.45M
Free cash flow
$5.91M
Fetching…
Sources
Is it cheap or expensive?
Fair value $13.09 vs current price $24.58
Wall Street consensus is the average analyst price target: $33.00 (152.1% higher than our fair-value estimate).
Our most-likely fair value is $13.09 a share — about 46.7% away from today's price of $24.58, so the stock currently looks fairly priced.
Is it drowning in debt?
Healthy
Net debt $15.4M. Interest coverage 210.0x.
Net debt
$15.38M
Interest coverage
210.03x
Lifeway Foods, Inc.'s profit covers its interest bill about 210.0 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
LWAY
BASELINE
Lifeway Foods, Inc.
Total debt $22.47M Interest coverage 210.03x This is the baseline the peer rows are being compared against.
Total debt $549.06M Interest coverage -0.99x -100% vs LWAY This peer has almost no interest-payment cushion compared with LWAY.
Total debt $407.81M Interest coverage -16.63x -100% vs LWAY This peer has almost no interest-payment cushion compared with LWAY.
Total debt $602.25M Interest coverage 1.09x -99% vs LWAY Carries about 193.1x less debt cushion than LWAY.
Total debt $12.92M Interest coverage 15.07x -93% vs LWAY Carries about 13.9x less debt cushion than LWAY.
What you should know
The case for and against LWAY
3 Rewards
1 Risk
Rewards
-
Revenue grew 14.1% last year.
-
Returns 13.3% on equity, ahead of 75% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Operating margin compressed from 1.7% to 0.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.62x
Forward P/E
18.21x
P/B
4.39x
P/S
1.53x
EV/EBITDA
19.40x
PEG ratio
3.50x
Profitability
How much profit each dollar creates
Gross margin
27.2%
Operating margin
0.9%
Net margin
4.5%
ROE
13.3%
ROA
8.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.27x
Current ratio
2.09x
Quick ratio
1.36x
Total debt
$22.47M
Total cash
$7.09M
Growth
How the business has been compounding
Revenue TTM
$242.41M
Revenue 5Y CAGR
15.6%
EPS TTM
0.69
EPS 5Y CAGR
145.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$11.22M
Free CF TTM
$-16.41M
FCF margin
-6.8%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2013-05-29