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 32 industry peers in the Beverages industry. Both the profitability and the financial health of PRMW get a neutral evaluation. Nothing too spectacular is happening here. PRMW is valued correctly, 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.
- In the past 5 years PRMW always reported a positive cash flow from operatings.
1.2 Ratios
- PRMW has a better Return On Assets (7.22%) than 60.61% of its industry peers.
- PRMW has a Return On Equity of 17.34%. This is in the better half of the industry: PRMW outperforms 63.64% of its industry peers.
- PRMW's Return On Invested Capital of 4.13% is on the low side compared to the rest of the industry. PRMW is outperformed by 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 11.62%.
- The 3 year average ROIC (3.20%) for PRMW is below the current ROIC(4.13%), indicating increased profibility in the last year.
| 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
- With an excellent Profit Margin value of 17.64%, PRMW belongs to the best of the industry, outperforming 81.82% of the companies in the same industry.
- PRMW's Profit Margin has declined in the last couple of years.
- PRMW has a worse Operating Margin (12.23%) than 63.64% of its industry peers.
- PRMW's Operating Margin has improved in the last couple of years.
- The Gross Margin of PRMW (68.16%) is better 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.
- Compared to 1 year ago, PRMW has an improved debt to assets ratio.
2.2 Solvency
- PRMW has an Altman-Z score of 1.96. This is not the best score and indicates that PRMW is in the grey zone with still only limited risk for bankruptcy at the moment.
- PRMW has a Altman-Z score of 1.96. This is comparable to the rest of the industry: PRMW outperforms 42.42% of its industry peers.
- 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.
- Looking at the Debt to Equity ratio, with a value of 0.86, PRMW is in line with its industry, outperforming 45.45% of the companies in the same 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
- PRMW has a Current Ratio of 2.34. This indicates that PRMW is financially healthy and has no problem in meeting its short term obligations.
- PRMW's Current ratio of 2.34 is fine compared to the rest of the industry. PRMW outperforms 66.67% of its industry peers.
- 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.
- PRMW's Quick ratio of 2.23 is amongst the best of the industry. PRMW outperforms 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.34 | ||
| Quick Ratio | 2.23 |
3. Growth
3.1 Past
- PRMW shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 12.20%, which is quite good.
- PRMW shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 22.74% yearly.
- 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
- PRMW is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 10.95% yearly.
- The Revenue is expected to decrease by -0.75% on average over the next years.
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.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
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.
- The rest of the industry has a similar Price/Earnings ratio as PRMW.
- When comparing the Price/Earnings ratio of PRMW to the average of the S&P500 Index (28.82), we can say PRMW is valued inline with the index average.
- Based on the Price/Forward Earnings ratio of 21.19, the valuation of PRMW can be described as rather expensive.
- The rest of the industry has a similar Price/Forward Earnings ratio as PRMW.
- PRMW is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.95, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 21.19 |
4.2 Price Multiples
- PRMW's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PRMW is cheaper than 60.61% of the companies 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
- The 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.
- PRMW's Dividend Yield is comparable with the industry average which is at 1.66.
- PRMW's Dividend Yield is slightly below the S&P500 average, which is at 1.82.
| 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 been paying a dividend for at least 10 years, so it has a reliable track record.
- PRMW has not decreased their dividend for at least 10 years, which is a reliable track record.
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.
- The dividend of PRMW is growing, but earnings are growing more, so the dividend growth is 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.