LivaNova PLC (LIVN): what the price assumes
In the published model solve dated 2026-Q2, anchored at $81.90, LivaNova PLC (LIVN) is priced for today's economics sustained for ~5.2 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LIVN
Headline
| Field | Value |
|---|---|
| Ticker | LIVN |
| Company | LivaNova PLC |
| Current price | $81.90/sh |
| Composition | Cardiopulmonary 57% / Neuromodulation 43% / Other Revenue 1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 8.0% |
| Operating margin today | 13.4% |
| Margin compression (value-band) | -5.4pp |
| Must persist for | 5.2y |
| Multiple paid | 22x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 10.1% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.7 years.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | +0.37σ |
| cohort percentile (of 116 peers) | 47 |
| sustained it ~5.2 years at this level | 35% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.04x | 5 | expensive |
| Earnings | 2.98x | 5 | expensive |
| Relative | 1.32x | 5 | expensive |
| Growth | 0.83x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.7%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $116.28 | 0.70x | yes | FCF base $0.3B, growth 12% (input: historical growth), terminal g 4.0%, WACC 8.7%, 6yr projection |
| DCF Exit Multiple | Growth | $98.20 | 0.83x | yes | Exit EV/EBITDA: 19.9x / 21.9x / 23.9x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $62.28 | 1.32x | yes | P/E 29.63x (blended: static sector reference 24x + trailing (TTM) 43x), scenarios: 24.4x / 29.6x / 34.8x (bear / base = reference held flat / bull), EV/EBITDA 16x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $20.71 | 3.95x | yes | BV/sh $21.65, ROE (TTM) 8.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $20.25 | 4.04x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $71.29 | 1.15x | yes | Rev $1.4B, growth 12% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.2x / 3.8x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $53.80 | 1.52x | yes | EPS $1.96, growth 27% (input: historical EPS growth), PEG=1.56 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $14.97 | 5.47x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.08B × (1−21%) / WACC 8.7% → EPV (no growth) |
| Residual Income | Asset | $20.17 | 4.06x | yes | BV $21.65 + 5yr PV of (ROE (TTM) 8.8% − Kₑ 9.3%) × BV; BV grows 5.7%/yr |
| Graham Number | Asset | $30.90 | 2.65x | yes | √(22.5 × EPS $1.96 × BVPS $21.65) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $60.86 | 1.35x | yes | EBITDA $0.20B × sector EV/EBITDA 16.0x |
| FCF Yield | Earnings | $34.63 | 2.37x | yes | FCF $161.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $27.52 | 2.98x | yes | SBC-adj FCF $0.12B (FCF $0.16B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $63.24 | 1.30x | yes | EPS $1.96 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $8.00 | 10.24x | yes | BV $21.65 × (ROIC 3.2% / WACC 8.7%) |
| P/Sales Sector | Relative | $102.49 | 0.80x | yes | Revenue $1.43B × sector P/S 4.0x |
| PEG Fair Value | Relative | $73.50 | 1.11x | yes | EPS $1.96 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $21.19 | 3.87x | yes | EPS $1.96 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net cash | $251.8m |
| Net debt / NOPAT (after-tax) | -1.66x (net cash) |
| Net debt / operating income (pre-tax) | -1.31x (net cash) |
| Interest coverage | 4.5x |
| Share count CAGR (dilution) | 0.8% |
| Burning cash | no |
Bullet Takeaways
- LivaNova is a medical-device maker built on two franchises, cardiopulmonary equipment used in cardiac surgery and a neuromodulation business anchored by its VNS Therapy implant for epilepsy, with a newer push into sleep apnea via the aura6000 nerve-stimulation system.
- The defining risk is the price relative to demonstrated profit: at roughly 21 times company-wide operating income, the stock requires operating profit to grow about 23% a year for five years, well above the high-single-digit revenue growth the company itself guides to.
- The next markers are clinical and regulatory: the aura6000 won FDA approval for obstructive sleep apnea, and management raised full-year guidance after a double-digit Q1, so watch whether the sleep-apnea launch and neuromodulation pipeline convert into the durable growth the price assumes.
Bull Case
The market is pricing LivaNova for an acceleration, and the most recent quarter is the first real evidence that the acceleration is showing up. The gap between what the price assumes and what the trailing numbers show has been the bear's whole argument, but Q1 FY2026 narrowed it: net revenue grew 14.3% year over year to $362.3 million, with the cardiopulmonary segment up 18.3% and neuromodulation up 9.3%. That is double-digit growth on a business the static methods had written off as a low-single-digit grower, and it is exactly the kind of print that turns a durability premium from a hope into a trend. Management responded by raising full-year guidance, which is the signal that the quarter was not a one-off.
The franchises underneath are genuinely defensible. The neuromodulation business is built on the VNS Therapy System, which the 10-K describes as "an implantable pulse generator, a lead that connects the generator to the vagus nerve, and other accessories" for treating epilepsy. The economics of an implant franchise are unusually sticky: once a patient is implanted, the recurring revenue follows, and crucially the filing notes "the lead does not need to be removed to replace a generator with a depleted battery," so each implanted patient becomes a multi-decade stream of generator replacements. That installed base is an annuity the static earnings methods do not credit because it does not show up as growth, only as durability.
The growth call option is the sleep-apnea entry. LivaNova received FDA approval for the aura6000 hypoglossal nerve stimulation system for moderate-to-severe obstructive sleep apnea, and management has highlighted it as the first such device approved without certain procedural counterindications. Obstructive sleep apnea is a large and under-penetrated market, and a company with a proven neuromodulation platform extending it into a new and bigger indication is the cleanest version of the durable-compounding thesis. The supporting OSPREY trial results, published in a peer-reviewed journal, give the launch clinical credibility rather than leaving it as a regulatory checkbox. If cardiopulmonary keeps printing high-teens growth while the sleep-apnea franchise ramps on top of the epilepsy annuity, the 23% operating-profit growth the price requires stops looking heroic and starts looking like simple math on two compounding franchises.
Bear Case
The bear case starts with how management has historically deployed capital, because LivaNova's record is one of value leaking out the back door even when the front-door business performed. Return on equity sits at about 8.8%, below the roughly 9.3% cost of equity, which means the company has been earning less on its book of capital than that capital costs, a quiet form of value destruction the headline revenue growth obscures. For a medical-device company with sticky implant franchises, an ROE below the cost of equity is a red flag about where the cash has gone: into acquisitions, legacy liabilities, and a balance sheet that has not translated franchise quality into shareholder returns. The excess-return methods reflect this directly, landing near $20 a share against a $78 price (June 27, 2026), because a business earning below its cost of capital generates no premium over its $21.65 book value in those frames.
The valuation requirement compounds the concern. At roughly 21 times company-wide operating income, the price needs operating profit to grow about 23% a year for five years, against a company whose own full-year guidance calls for constant-currency revenue growth of 7% to 8%. The arithmetic of that gap is unforgiving: for 23% operating-profit growth on 8% revenue growth, the company has to expand operating margin sharply and sustain it, from a current 13.4% toward a level it has not held. Only the forward-growth lens reaches the price at all; the earnings-power method lands near a fifth of it, and the asset-value methods near a quarter. The whole price rests on margin expansion that has to come from operating leverage the company has historically struggled to capture, which is precisely the capital-discipline question restated.
The structural overhang is regulatory and reimbursement dependence. A device company lives and dies on whether payers cover its products, and the 10-K flags exactly this exposure, warning of "changes or reduction in reimbursement for the Company's products" and the risk of "restricted access and pricing as well as payback requirements and limited reimbursement". The sleep-apnea opportunity the bull leans on is entirely contingent on reimbursement following the FDA approval, and the neuromodulation franchise faces the same payer scrutiny in its core epilepsy market. Legacy liabilities and the cost of integrating acquisitions have weighed on the balance sheet before, and a company priced for 23% profit growth has no room for the kind of one-time charge or reimbursement setback that its own risk disclosures describe as routine in its industry. The bear does not dispute the franchises; it disputes that a management team earning below its cost of capital will convert them into the returns the price assumes.
Valuation
The price assumes an acceleration the company's own guidance does not. At today's level the market pays roughly 21 times company-wide operating income, which inverts to a requirement of about 23% operating-profit growth a year for five years. LivaNova guides to constant-currency revenue growth of 7% to 8%, so the price is not paying for revenue growth; it is paying for a large and sustained margin expansion on top of modest revenue growth, lifting operating margin from the current 13.4% toward something well above it.
The methods split with only one family reaching the price. The forward-growth lens gets there: a perpetual-growth DCF crediting 12% growth and an exit-multiple model holding today's EV/EBITDA near 21 times both land at or above the price. But the static frames read the stock as richly valued. The peer-multiple lens, anchored on a blended P/E near 29 times, sits below the price. The earnings-power method, capitalizing normalized operating profit with no growth, lands near $15 a share. And the asset-value methods land near $20, because return on equity at 8.8% sits just under the 9.3% cost of equity, generating essentially no excess return over the $21.65 book value. The pattern is the durability-premium configuration: only the growth-crediting method defends the price, which means the entire valuation is a bet on durable compounding that the methods anchored on demonstrated economics structurally cannot frame.
The cohort comparison places the bet in context. The peer set spans medical-device and dental names, Solventum, Align Technology, Bausch and Lomb, Merit Medical, and Artivion, businesses the market also values on franchise durability and pipeline rather than trailing profit, so LivaNova's premium is not unusual within its cohort; it is a member of a group the market prices forward. Solvency is not the primary concern: dilution runs about 1.1% a year and the company generates positive free cash flow, with guidance reaffirming $160 million to $180 million for the year. The decisive figure is the one that recurs across every static method: an 8.8% return on equity below the cost of capital. The buyer at this price is underwriting that a company which has historically earned less on its capital than that capital costs will now expand margins fast enough to validate a growth multiple, and that is the assumption the whole valuation rests on.
Catalysts
The Q1 FY2026 print was the catalyst that moved the stock, and it cut for the bull. Net revenue grew 14.3% year over year to $362.3 million, with cardiopulmonary up 18.3% and neuromodulation up 9.3%, adjusted operating income reached $71.1 million, and adjusted diluted EPS rose to $0.98. On the strength of that, management lifted full-year guidance to constant-currency revenue growth of 7% to 8% and adjusted EPS of $4.20 to $4.30, while reaffirming adjusted free cash flow of $160 million to $180 million. A double-digit revenue quarter paired with a guidance raise is the combination that supports the durability thesis, and the stock responded with a sharp move higher.
The regulatory catalyst is the sleep-apnea entry. LivaNova received FDA premarket approval for the aura6000 system for adults with moderate-to-severe obstructive sleep apnea, which management framed as the first hypoglossal nerve stimulation device approved without certain procedural counterindications. The clinical support came from the OSPREY randomized controlled trial, whose full twelve-month results were published in a peer-reviewed journal showing sustained responses. Approval is the starting gun, not the finish line: the launch trajectory and, critically, payer reimbursement for the new indication are the markers that determine whether the sleep-apnea opportunity becomes the growth engine the price needs.
The watch items are concrete and near-term. Track the cardiopulmonary segment's ability to sustain high-teens growth as comparisons stiffen, the early commercial uptake of aura6000 and the reimbursement decisions that gate it, and any sign that operating margin is expanding toward the level the price requires rather than holding flat. Because the valuation rests on margin expansion the company has historically found difficult, the most important catalyst is not the next revenue number but the next operating-margin number, since that is the variable the static methods say the price most needs to see move.
Peer Cohorts (Per Segment, With Filing Citations)
Cardiopulmonary (reported)
- EW (EDWARDS LIFESCIENCES CORPORATION)
- FY2025 10-K: …with an Edwards annuloplasty ring. Alternatively, an interventional cardiologist or cardiac surgeon may implant an Edwards transcatheter valve or repair system via a catheter-based approach that does not require traditional open-heart surgery and can be done while the heart continues to beat. Corporate Background Our…
- FY2025 10-K: …and complex patients in need. Edwards remains committed to its strategy of transformative product innovation, high-quality, expansive clinical evidence to support approvals and adoption, as well as comprehensive support to ensure excellent real-world patient outcomes. Cardiovascular disease is the number-one cause of…
- ATRC (AtriCure, Inc.)
- FY2025 10-K: …the body of clinical evidence. We believe publication of additional scientific evidence, in addition to robust ongoing research activities, will ultimately create an increased demand for our products. Build Physician and Societal Relationships. We have formed consulting relationships with cardiothoracic surgeons,…
- FY2025 10-K: AtriCure Solutions and Products We believe that we are currently the market leader in the surgical treatment of Afib and LAAM, and pioneers of the application of Cryo Nerve Block in cardiac, thoracic and amputation surgical procedures. We anticipate that substantially all our revenue for the foreseeable future will…
- AORT (ARTIVION, INC.)
- FY2025 10-K: Net Health ("LifeNet") and LeMaitre Vascular ("LeMaitre"), offer preserved human heart valves and patches in competition with us. We believe that we compete favorably on the basis of surgeon preference, documented clinical data, technology, and customer service, particularly with respect to the capabilities of our…
- FY2025 10-K: …as adjustments to revenue, partially offset by an increase in PhotoFix and PerClot revenues. See Part II, Item 8, Note 11 of the "Notes to Consolidated Financial Statements" for further discussion regarding the Italian payback measure. Preservation Services Preservation services include service revenues from…
- MMSI (MERIT MEDICAL SYSTEMS INC)
- FY2025 10-K: …market medical products for interventional and diagnostic procedures. For financial reporting purposes, we report our operations in two operating segments: cardiovascular and endoscopy. Our cardiovascular segment consists of four product categories: peripheral intervention, cardiac intervention, custom procedural…
- FY2025 10-K: …System, one of our innovative soft tissue core needle biopsy and accessory products, designed to cut a full core of tissue and provide large specimens for pathological examination; ● Achieve®, Temno® and Tru-Cut® Soft Tissue Biopsy Devices which are designed to produce superior soft tisuue biopsy samples; ●…
- TFX (TELEFLEX INCORPORATED)
- FY2025 10-K: , by and between the Company and Lotus US Bidco Inc. (incorporated by reference to Exhibit 2.1 to the Company's Form 8-K filed on December 9, 2025). #*2.2 - Equity Purchase Agreement, dated December 9, 2025, by and between the Company, Intersurgical Limited, Intersurgical AG, Intersurgical Inc., Engineered Medical…
- FY2025 10-K: …by reference to Exhibit 4.1.4 to the Company's Form 10-K filed on March 1, 2022). *4.1.5 - Ninth Supplemental Indenture, dated November 7, 2022, by and among Standard Bariatrics, Inc., Traverse Vascular, Inc., the Company and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association)…
Neuromodulation (reported)
- MMSI (MERIT MEDICAL SYSTEMS INC)
- FY2025 10-K: …("Teleflex"), Cook Medical Incorporated ("Cook Medical"), Medtronic plc ("Medtronic"), Boston Scientific Corporation ("Boston Scientific"), and Becton, Dickinson and Company ("BD"). Our primary competitors in our cardiac intervention market are BD, Teleflex, Medtronic, Abbott Laboratories, Terumo Corporation, Edwards…
- FY2025 10-K: …of the heart. Cardiac rhythm management ("CRM") is the field of cardiac disease therapy that relates to the diagnosis and treatment of cardiac arrhythmias or the improper beating of the heart. The principal product offerings in our electrophysiology and CRM portfolio include our: ● Evolution® system for lead removal…
- LMAT (LEMAITRE VASCULAR, INC.)
- FY2025 10-K: …our ability to manufacture our products and result in production delays and increased costs. This could lead to loss of sales and customers, and our results of operations could be harmed. In some cases, changes to raw material suppliers or use of alternative raw materials may require significant testing and…
- FY2025 10-K: …operations, including regulatory complexity, reimbursement changes, distributor relationships, foreign exchange volatility, political instability and compliance with anti-corruption and trade laws. • Our reliance on sole-source and limited-source suppliers, including suppliers of biologic and tissue-based products,…
- EW (EDWARDS LIFESCIENCES CORPORATION)
- FY2025 10-K: …manner or at all. Even if we timely innovate and develop products, our ability to successfully market them could be limited by a number of different factors, including competitive products and pricing, barriers in patient activation (including disease awareness, detection, and diagnosis), restrictive requirements in…
- FY2025 10-K: …and Medical Devices Act (PMD Act)" and "Ordinance for execution of PMD Act" to ensure the quality and safety of imported medical devices. As with any highly regulated market, significant changes in the regulatory environment could adversely affect future sales. 8 Table of Contents In many of the other foreign…
- TFX (TELEFLEX INCORPORATED)
- FY2025 10-K: …by reference to Exhibit 4.1.4 to the Company's Form 10-K filed on March 1, 2022). *4.1.5 - Ninth Supplemental Indenture, dated November 7, 2022, by and among Standard Bariatrics, Inc., Traverse Vascular, Inc., the Company and Computershare Trust Company, N.A. (as successor to Wells Fargo Bank, National Association)…
- FY2025 10-K: …film-cast tubing, diagnostic and interventional catheters, balloons and balloon catheters, film-insulated fine wire, coated mandrel wire, conductors, sheath/dilator introducers, specialized sutures and performance fibers, bioabsorbable sutures, yarns and resins. GOVERNMENT REGULATION We are subject to comprehensive…
- BSX (BOSTON SCIENTIFIC CORP)
- FY2025 10-K: …Our Neuromodulation business develops and manufactures devices to treat various neurological movement disorders and manage chronic pain. In 2025, reported net sales growth was primarily driven by our Intracept™ Intraosseous Nerve Ablation System, and our spinal cord stimulation and deep brain stimulation franchises.…
- FY2025 10-K: …disorders, including our Axonics™ Sacral Neuromodulation System (Axonics™) and our Bulkamid™ Uretheral Bulking System. 4 Neuromodulation Our Neuromodulation business unit develops and manufactures devices to treat various neurological movement disorders and manage chronic pain. Our product offerings include our…
- MDT (Medtronic plc)
- FY2025 10-K: …ear, nose, and throat (ENT), and the treatment of overactive bladder and urinary retention. Neuroscience also manufactures products related to implantable neurostimulation therapies and drug delivery systems for the treatment of chronic pain, movement disorders, and epilepsy. Neuroscience's net sales for fiscal year…
- FY2025 10-K: …we expect Neuroscience could be affected by the following: • Continued adoption and growth of our integrated solutions through the AiBLE offering, which integrates spinal implants with enabling technologies (StealthStation, O-arm Imaging Systems, and Midas), Mazor robotics, and UNiD Adaptive Spine Intelligence…
- HAE (HAEMONETICS CORPORATION)
- FY2025 10-K: …("TAVR") market, characterized by high growth, the demand for innovative solutions like SavvyWire is driven by an aging population and increasing prevalence of aortic valve diseases globally. Conversely, in the more mature percutaneous coronary intervention ("PCI") market, the steady demand for sensor-guided…
- FY2025 10-K: …or thrombosis conditions in cardiovascular surgery and cardiology procedures as well as to evaluate the hemostasis condition in adult trauma patients. TEG 6s PlateletMapping ® ADP & AA Cartridge can help understand a patient's platelet function and provide insight into the risk of bleeding and greater confidence in…
- ICUI (ICU MEDICAL INC/DE)
- FY2025 10-K: …include Edwards Lifesciences, Belmont, Medical Technologies and Intersurgical plc. 12 Our ability to compete in this market will depend on our ability to continue to make technological advances to our products, thereby increasing customer efficiency, and our ability to provide product support and successful customer…
- FY2025 10-K: …choose to purchase from our competitors due to the price or quality offered by such competitors, which could result in a decline in our sales and profitability. In addition, distributors of our products may begin to negotiate terms of sale more aggressively in an effort to increase their profitability. Failure to…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q1 FY2026 earnings release · FY2024 10-K · aura6000 FDA approval, March 2026 · FY2024 10-K risk factors · OSPREY trial publication, 2026