"based on the FOOL's article ..."
That is a FOOL's "article" all right. Better put, it's an oversimplified rationalization piece. Backward looking estimates from an economic climate in which people larded up on $5,000-$10,000 "goodies" (like elective surgery) by raiding home equity, filling out phony credit applications and piling up credit card debt, are a pretty poor metric by which to measure the true worth of a business.
Calculating off outdated and clearly unrealistic forward estimates is even more "Foolish". At this point, things have gone so far into the crapper so fast, that management won't even give forward guidance -- other than to say the current consensus should be yanked back. Don't be surprised if LCA actually goes cash flow negative in the next few quarter.
It has a very high fixed cost base, meaning margins get crushed on even modest downturns in demand. You might want to check and see what percentage of procedures done in their facilities over the past 2 years were financed rather than paid for, then consider that the financing company LCAV was using has just reigned in their financing big-time. Bottom line, figure out what percentage of procedures (and thus Revenues) from the past 2 years, could not happen in today's lending environment and use that as your forward Revenue projection. Then lay that on top of the fixed costs and see what it would produce in forward (normalized) earnings. Earnings of the past 2 years were basically a financing-created fiction.
That's not to say LCAV doesn't have a good business in a niche of healthcare with good secular growth for the foreseeable future. But trying to rationalize stock price on bogus numbers is a good way to get exposed to more risk than one might think.
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