Primo Water Corporation (PRMW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PRMW - CA74167P1080 - Common Stock
24.21 USD
-0.23 (-0.94%)
24.26 USD
+0.05 (+0.21%)
Overall PRMW gets a fundamental rating of 5 out of 10. We evaluated PRMW against 33 industry peers in the Beverages industry. PRMW has an average financial health and profitability rating. PRMW has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- PRMW had positive earnings in the past year.
- PRMW had a positive operating cash flow in the past year.
- The reported net income has been mixed in the past 5 years: PRMW reported negative net income in multiple years.
- Each year in the past 5 years PRMW had a positive operating cash flow.
1.2 Ratios
- PRMW has a Return On Assets of 7.22%. This is in the better half of the industry: PRMW outperforms 60.61% of its industry peers.
- Looking at the Return On Equity, with a value of 17.34%, PRMW is in the better half of the industry, outperforming 63.64% of the companies in the same industry.
- The Return On Invested Capital of PRMW (4.13%) is worse than 72.73% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for PRMW is significantly below the industry average of 11.45%.
- The last Return On Invested Capital (4.13%) for PRMW is above the 3 year average (3.20%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.22% | ||
| ROE | 17.34% | ||
| ROIC | 4.13% |
ROA(3y)2.49%
ROA(5y)0.78%
ROE(3y)6.19%
ROE(5y)1.81%
ROIC(3y)3.2%
ROIC(5y)3.02%
1.3 Margins
- PRMW has a better Profit Margin (17.64%) than 81.82% of its industry peers.
- In the last couple of years the Profit Margin of PRMW has declined.
- The Operating Margin of PRMW (12.23%) is worse than 63.64% of its industry peers.
- In the last couple of years the Operating Margin of PRMW has grown nicely.
- PRMW has a better Gross Margin (68.16%) than 100.00% of its industry peers.
- In the last couple of years the Gross Margin of PRMW has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.23% | ||
| PM (TTM) | 17.64% | ||
| GM | 68.16% |
OM growth 3Y10.6%
OM growth 5Y18.86%
PM growth 3YN/A
PM growth 5Y-8.87%
GM growth 3Y4.02%
GM growth 5Y2.34%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PRMW is destroying value.
- PRMW has about the same amout of shares outstanding than it did 1 year ago.
- The debt/assets ratio for PRMW has been reduced compared to a year ago.
2.2 Solvency
- An Altman-Z score of 1.96 indicates that PRMW is not a great score, but indicates only limited risk for bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 1.96, PRMW is in line with its industry, outperforming 42.42% of the companies in the same industry.
- PRMW has a debt to FCF ratio of 5.49. This is a neutral value as PRMW would need 5.49 years to pay back of all of its debts.
- PRMW has a better Debt to FCF ratio (5.49) than 69.70% of its industry peers.
- A Debt/Equity ratio of 0.86 indicates that PRMW is somewhat dependend on debt financing.
- The Debt to Equity ratio of PRMW (0.86) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.86 | ||
| Debt/FCF | 5.49 | ||
| Altman-Z | 1.96 |
ROIC/WACC0.54
WACC7.61%
2.3 Liquidity
- A Current Ratio of 2.34 indicates that PRMW has no problem at all paying its short term obligations.
- With a decent Current ratio value of 2.34, PRMW is doing good in the industry, outperforming 66.67% of the companies in the same industry.
- PRMW has a Quick Ratio of 2.23. This indicates that PRMW is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 2.23, PRMW belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.34 | ||
| Quick Ratio | 2.23 |
3. Growth
3.1 Past
- The Earnings Per Share has grown by an nice 12.20% over the past year.
- Measured over the past years, PRMW shows a very strong growth in Earnings Per Share. The EPS has been growing by 22.74% on average per year.
- The Revenue for PRMW has decreased by -36.45% in the past year. This is quite bad
- PRMW shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -0.22% yearly.
EPS 1Y (TTM)12.2%
EPS 3Y15.98%
EPS 5Y22.74%
EPS Q2Q%6.06%
Revenue 1Y (TTM)-36.45%
Revenue growth 3Y-3.2%
Revenue growth 5Y-0.22%
Sales Q2Q%-17.78%
3.2 Future
- The Earnings Per Share is expected to grow by 10.95% on average over the next years. This is quite good.
- Based on estimates for the next years, PRMW will show a decrease in Revenue. The Revenue will decrease by -0.75% on average per year.
EPS Next Y27.83%
EPS Next 2Y21.02%
EPS Next 3Y22.04%
EPS Next 5Y10.95%
Revenue Next Year-18.79%
Revenue Next 2Y-7.32%
Revenue Next 3Y-2.88%
Revenue Next 5Y-0.75%
3.3 Evolution
- The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
- The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- Based on the Price/Earnings ratio of 26.32, the valuation of PRMW can be described as expensive.
- PRMW's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.21. PRMW is around the same levels.
- With a Price/Forward Earnings ratio of 21.19, PRMW is valued on the expensive side.
- PRMW's Price/Forward Earnings is on the same level as the industry average.
- When comparing the Price/Forward Earnings ratio of PRMW to the average of the S&P500 Index (24.26), we can say PRMW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 21.19 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PRMW indicates a somewhat cheap valuation: PRMW is cheaper than 60.61% of the companies listed in the same industry.
- Based on the Price/Free Cash Flow ratio, PRMW is valued cheaply inside the industry as 84.85% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.59 | ||
| EV/EBITDA | 13.63 |
4.3 Compensation for Growth
- PRMW's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- PRMW has a very decent profitability rating, which may justify a higher PE ratio.
- PRMW's earnings are expected to grow with 22.04% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.95
PEG (5Y)1.16
EPS Next 2Y21.02%
EPS Next 3Y22.04%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 1.34%, PRMW has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 1.73, PRMW has a dividend in line with its industry peers.
- Compared to the average S&P500 Dividend Yield of 1.82, PRMW is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.34% |
5.2 History
- The dividend of PRMW has a limited annual growth rate of 1.16%.
- PRMW has paid a dividend for at least 10 years, which is a reliable track record.
- PRMW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)1.16%
Div Incr Years2
Div Non Decr Years11
5.3 Sustainability
- PRMW pays out 22.12% of its income as dividend. This is a sustainable payout ratio.
- PRMW's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP22.12%
EPS Next 2Y21.02%
EPS Next 3Y22.04%
Primo Water Corporation / PRMW FAQ
What is the fundamental rating for PRMW stock?
ChartMill assigns a fundamental rating of 5 / 10 to PRMW.
What is the valuation status for PRMW stock?
ChartMill assigns a valuation rating of 5 / 10 to Primo Water Corporation (PRMW). This can be considered as Fairly Valued.
What is the profitability of PRMW stock?
Primo Water Corporation (PRMW) has a profitability rating of 6 / 10.
What is the valuation of Primo Water Corporation based on its PE and PB ratios?
The Price/Earnings (PE) ratio for Primo Water Corporation (PRMW) is 26.32 and the Price/Book (PB) ratio is 2.62.
What is the expected EPS growth for Primo Water Corporation (PRMW) stock?
The Earnings per Share (EPS) of Primo Water Corporation (PRMW) is expected to grow by 27.83% in the next year.