Lark Distilling (ASX:LRK) - Share price, News & Analysis

LRK fundamental analysis
Snowflake Score
Valuation	0/6
Future Growth	5/6
Past Performance	4/6
Financial Health	5/6
Dividends	0/6

LRK Stock Overview

Lark Distilling Co. Ltd produces and sells single malt whisky.

Rewards

Earnings are forecast to grow 42.61% per year

Earnings grew by 21985% over the past year

Risk Analysis

High level of non-cash earnings

Shareholders have been diluted in the past year

Lark Distilling Competitors

Australian Vintage

ASX:AVG

AU$165.3m

Treasury Wine Estates

ASX:TWE

AU$9.1b

Maggie Beer Holdings

ASX:MBH

AU$124.9m

Good Drinks Australia

ASX:GDA

AU$94.4m

Price History & Performance

Summary of all time highs, changes and price drops for Lark Distilling
Historical stock prices
Current Share Price	AU$3.24
52 Week High	AU$5.60
52 Week Low	AU$2.42
Beta	0.43
1 Month Change	28.06%
3 Month Change	14.89%
1 Year Change	-33.74%
3 Year Change	208.57%
5 Year Change	227.27%
Change since IPO	-99.28%

Shareholder Returns

	LRK	AU Beverage	AU Market
7D	17.4%	2.0%	1.8%
1Y	-33.7%	-3.4%	-5.7%

Return vs Industry: LRK underperformed the Australian Beverage industry which returned -3.4% over the past year.

Return vs Market: LRK underperformed the Australian Market which returned -5.7% over the past year.

Price Volatility

Is LRK's price volatile compared to industry and market?
LRK volatility
LRK Average Weekly Movement	8.6%
Beverage Industry Average Movement	6.3%
Market Average Movement	10.6%
10% most volatile stocks in AU Market	17.7%
10% least volatile stocks in AU Market	4.6%

Stable Share Price: LRK is not significantly more volatile than the rest of Australian stocks over the past 3 months, typically moving +/- 9% a week.

Volatility Over Time: LRK's weekly volatility (9%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1839	n/a	Laura McBain	https://www.larkdistillery.com

Lark Distilling Co. Ltd produces and sells single malt whisky. It also offers spirits and liqueurs, gin, slainte, brandy, rum, and sanitizers. The company was formerly known as Australian Whisky Holdings Limited and changed its name to Lark Distilling Co. Ltd in May 2020.

Lark Distilling Fundamentals Summary

How do Lark Distilling's earnings and revenue compare to its market cap?
LRK fundamental statistics
Market Cap	AU$222.15m
Earnings (TTM)	AU$2.97m
Revenue (TTM)	AU$22.21m

82.1x

P/E Ratio

11.0x

P/S Ratio

Is LRK overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
LRK income statement (TTM)
Revenue	AU$22.21m
Cost of Revenue	AU$10.93m
Gross Profit	AU$11.28m
Other Expenses	AU$8.30m
Earnings	AU$2.97m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Aug 29, 2022

Earnings per share (EPS)	0.039
Gross Margin	50.77%
Net Profit Margin	13.38%
Debt/Equity Ratio	4.6%

How did LRK perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

0/6

Valuation Score 0/6

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

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for LRK. This is calculated by dividing LRK's market cap by their current preferred multiple.
What is LRK's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	AU$222.15m

LRK 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	7.8x
Enterprise Value/EBITDA	152.3x
PEG Ratio	1.9x

Price to Earnings Ratio vs Peers

How does LRK's PE Ratio compare to its peers?

LRK PE Ratio vs Peers

The above table shows the PE ratio for LRK vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	23.5x
AVG Australian Vintage	10.4x	16.4%	AU$165.3m
TWE Treasury Wine Estates	37.8x	20.0%	AU$9.1b
MBH Maggie Beer Holdings	16.1x	n/a	AU$124.9m
GDA Good Drinks Australia	30x	n/a	AU$94.4m
LRK Lark Distilling	82.1x	42.6%	AU$222.2m

Price-To-Earnings vs Peers: LRK is expensive based on its Price-To-Earnings Ratio (82.1x) compared to the peer average (23.5x).

Price to Earnings Ratio vs Industry

How does LRK's PE Ratio compare vs other companies in the Global Beverage Industry?

Price-To-Earnings vs Industry: LRK is expensive based on its Price-To-Earnings Ratio (82.1x) compared to the Global Beverage industry average (21.2x)

Price to Earnings Ratio vs Fair Ratio

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

LRK PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	82.1x
Fair PE Ratio	31.8x

Price-To-Earnings vs Fair Ratio: LRK is expensive based on its Price-To-Earnings Ratio (82.1x) compared to the estimated Fair Price-To-Earnings Ratio (31.8x).

Share Price vs Fair Value

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

Below Fair Value: Insufficient data to calculate LRK's fair value for valuation analysis.

Significantly Below Fair Value: Insufficient data to calculate LRK's fair value for valuation analysis.

Analyst Price Targets

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

Analyst Forecast: Target price is more than 20% higher than the current share price, but there are not enough analysts covering the stock to determine statistical confidence in agreement.

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Future Growth

How is Lark Distilling forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

42.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LRK's forecast earnings growth (42.6% per year) is above the savings rate (1.8%).

Earnings vs Market: LRK's earnings (42.6% per year) are forecast to grow faster than the Australian market (6.1% per year).

High Growth Earnings: LRK's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LRK's revenue (28.6% per year) is forecast to grow faster than the Australian market (5.7% per year).

High Growth Revenue: LRK's revenue (28.6% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LRK's Return on Equity is forecast to be low in 3 years time (6.8%).

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Past Performance

How has Lark Distilling performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

41.5%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LRK has a high level of non-cash earnings.

Growing Profit Margin: LRK's current net profit margins (13.4%) are higher than last year (0.1%).

Past Earnings Growth Analysis

Earnings Trend: LRK has become profitable over the past 5 years, growing earnings by 41.5% per year.

Accelerating Growth: LRK's earnings growth over the past year (21985%) exceeds its 5-year average (41.5% per year).

Earnings vs Industry: LRK earnings growth over the past year (21985%) exceeded the Beverage industry 18.2%.

Return on Equity

High ROE: LRK's Return on Equity (2.8%) is considered low.

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Financial Health

How is Lark Distilling's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: LRK's short term assets (A$71.8M) exceed its short term liabilities (A$4.3M).

Long Term Liabilities: LRK's short term assets (A$71.8M) exceed its long term liabilities (A$7.3M).

Debt to Equity History and Analysis

Debt Level: LRK has more cash than its total debt.

Reducing Debt: LRK's debt to equity ratio has reduced from 29.9% to 4.6% over the past 5 years.

Debt Coverage: LRK's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: LRK's interest payments on its debt are well covered by EBIT (5.6x coverage).

Balance Sheet

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Dividend

What is Lark Distilling current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate LRK's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate LRK's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LRK's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LRK's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as LRK has not reported any payouts.

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Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure

CEO

Laura McBain

0.50yr

Tenure

AU$58,129

Compensation

Ms. Laura Nicole McBain, B.Com, serves as Interim Managing Director at Lark Distilling Co. Ltd since February 15, 2022. She serves as Independent Non-Executive Director at Capitol Health Limited since July...

Leadership Team

Experienced Management: LRK's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.

Board Members

Experienced Board: LRK's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 19.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/17 00:00
End of Day Share Price	2022/08/17 00:00
Earnings	2021/12/31
Annual Earnings	2021/06/30