Lynch Group Holdings Valuation

Q: What is the Fair Price of LGL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

LGL (A$1.75) is trading below our estimate of [[fair value]] (A$4.93)

Is LGL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of LGL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: LGL (A$1.75) is trading below our estimate of fair value (A$4.93)

Significantly Below Fair Value: LGL is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for LGL?

Key metric: As LGL is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for LGL. This is calculated by dividing LGL's market cap by their current revenue.
What is LGL's PS Ratio?
PS Ratio	0.5x
Sales	AU$397.72m
Market Cap	AU$207.51m

LGL key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	8.3x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does LGL's PS Ratio compare to its peers?

The above table shows the PS ratio for LGL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	1.5x
SHV Select Harvests	2.5x	11.5%	AU$508.7m
RIC Ridley	0.7x	4.7%	AU$869.0m
DBF Duxton Farms	2.4x	n/a	AU$58.3m
ELD Elders	0.4x	6.1%	AU$1.2b
LGL Lynch Group Holdings	0.5x	5.9%	AU$207.5m

Price-To-Sales vs Peers: LGL is good value based on its Price-To-Sales Ratio (0.5x) compared to the peer average (1.5x).

Price to Sales Ratio vs Industry

How does LGL's PS Ratio compare vs other companies in the AU Food Industry?

6 Companies	Price / Sales	Estimated Growth	Market Cap
NOU Noumi	0.09x	3.2%	US$36.94m
MBH Maggie Beer Holdings	0.2x	n/a	US$12.90m
BFC Beston Global Food	0.04x	n/a	US$4.12m
TFL TasFoods	0.1x	n/a	US$3.69m

6 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Sales vs Industry: LGL is good value based on its Price-To-Sales Ratio (0.5x) compared to the Australian Food industry average (0.9x).

Price to Sales Ratio vs Fair Ratio

What is LGL's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

LGL PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.5x
Fair PS Ratio	1.1x

Price-To-Sales vs Fair Ratio: LGL is good value based on its Price-To-Sales Ratio (0.5x) compared to the estimated Fair Price-To-Sales Ratio (1.1x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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