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Primo Water Corporation (PRMW) Stock Fundamental Analysis

USA - NYSE:PRMW - CA74167P1080 - Common Stock

24.21 USD
-0.23 (-0.94%)
Last: 11/8/2024, 8:15:10 PM
24.26 USD
+0.05 (+0.21%)
After Hours: 11/8/2024, 8:15:10 PM
Fundamental Rating

5

PRMW gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 32 industry peers in the Beverages industry. PRMW has an average financial health and profitability rating. PRMW is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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6

1. Profitability

1.1 Basic Checks

In the past year PRMW was profitable.
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.
PRMW Yearly Net Income VS EBIT VS OCF VS FCFPRMW Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M 200M 300M

1.2 Ratios

With a decent Return On Assets value of 7.22%, PRMW is doing good in the industry, outperforming 60.61% of the companies in the same industry.
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.
Looking at the Return On Invested Capital, with a value of 4.13%, PRMW is doing worse than 72.73% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PRMW is significantly below the industry average of 10.90%.
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 RankSector 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%
PRMW Yearly ROA, ROE, ROICPRMW Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 10 20 30

1.3 Margins

PRMW's Profit Margin of 17.64% is amongst the best of the industry. PRMW outperforms 81.82% of its industry peers.
In the last couple of years the Profit Margin of PRMW has declined.
Looking at the Operating Margin, with a value of 12.23%, PRMW is doing worse than 63.64% of the companies in the same industry.
PRMW's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 68.16%, PRMW belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Gross Margin of PRMW has grown nicely.
Industry RankSector 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%
PRMW Yearly Profit, Operating, Gross MarginsPRMW Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 40 60

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6

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PRMW is destroying value.
Compared to 1 year ago, PRMW has about the same amount of shares outstanding.
Compared to 5 years ago, PRMW has more shares outstanding
Compared to 1 year ago, PRMW has an improved debt to assets ratio.
PRMW Yearly Shares OutstandingPRMW Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 50M 100M 150M
PRMW Yearly Total Debt VS Total AssetsPRMW Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B

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.
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.
The Debt to FCF ratio of PRMW is 5.49, which is a neutral value as it means it would take PRMW, 5.49 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 5.49, PRMW is doing good in the industry, outperforming 69.70% of the companies in the same industry.
PRMW has a Debt/Equity ratio of 0.86. This is a neutral value indicating PRMW is somewhat dependend on debt financing.
PRMW has a Debt to Equity ratio (0.86) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.86
Debt/FCF 5.49
Altman-Z 1.96
ROIC/WACC0.54
WACC7.61%
PRMW Yearly LT Debt VS Equity VS FCFPRMW Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.3 Liquidity

A Current Ratio of 2.34 indicates that PRMW has no problem at all paying its short term obligations.
PRMW has a better Current ratio (2.34) than 66.67% of its industry peers.
A Quick Ratio of 2.23 indicates that PRMW has no problem at all paying its short term obligations.
The Quick ratio of PRMW (2.23) is better than 90.91% of its industry peers.
Industry RankSector Rank
Current Ratio 2.34
Quick Ratio 2.23
PRMW Yearly Current Assets VS Current LiabilitesPRMW Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

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3

3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 12.20% over the past year.
The Earnings Per Share has been growing by 22.74% on average over the past years. This is a very strong growth
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.
PRMW is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.75% yearly.
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.
PRMW Yearly Revenue VS EstimatesPRMW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 1B 2B 3B
PRMW Yearly EPS VS EstimatesPRMW Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 0 0.5 1

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5

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 26.32, PRMW can be considered very expensive at the moment.
The rest of the industry has a similar Price/Earnings ratio as PRMW.
The average S&P500 Price/Earnings ratio is at 27.53. PRMW is around the same levels.
With a Price/Forward Earnings ratio of 21.19, PRMW is valued on the expensive side.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PRMW is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of PRMW to the average of the S&P500 Index (23.04), we can say PRMW is valued inline with the index average.
Industry RankSector Rank
PE 26.32
Fwd PE 21.19
PRMW Price Earnings VS Forward Price EarningsPRMW Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

60.61% of the companies in the same industry are more expensive than PRMW, based on the Enterprise Value to EBITDA ratio.
84.85% of the companies in the same industry are more expensive than PRMW, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 16.59
EV/EBITDA 13.63
PRMW Per share dataPRMW EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 2 4 6 8

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.
The decent profitability rating of PRMW may justify a higher PE ratio.
A more expensive valuation may be justified as PRMW's earnings are expected to grow with 22.04% in the coming years.
PEG (NY)0.95
PEG (5Y)1.16
EPS Next 2Y21.02%
EPS Next 3Y22.04%

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6

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 3.05.
Compared to an average S&P500 Dividend Yield of 2.40, PRMW's dividend is way lower than the S&P500 average.
Industry RankSector 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
PRMW Yearly Dividends per sharePRMW Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

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%
PRMW Yearly Income VS Free CF VS DividendPRMW Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M 200M 300M
PRMW Dividend Payout.PRMW Dividend Payout, showing the Payout Ratio.PRMW Dividend Payout.PayoutRetained Earnings

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Primo Water Corporation

NYSE:PRMW (11/8/2024, 8:15:10 PM)

After market: 24.26 +0.05 (+0.21%)

24.21

-0.23 (-0.94%)

Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)11-07 2024-11-07/bmo
Earnings (Next)N/A N/A
Inst Owners89.04%
Inst Owner Change0%
Ins Owners2.23%
Ins Owner Change0%
Market Cap3.88B
Analysts82.86
Price Target17.35 (-28.34%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 1.34%
Yearly Dividend0.32
Dividend Growth(5Y)1.16%
DP22.12%
Div Incr Years2
Div Non Decr Years11
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)7.7%
Min EPS beat(2)1.96%
Max EPS beat(2)13.43%
EPS beat(4)3
Avg EPS beat(4)3.94%
Min EPS beat(4)-29.61%
Max EPS beat(4)29.96%
EPS beat(8)6
Avg EPS beat(8)7.5%
EPS beat(12)8
Avg EPS beat(12)8.05%
EPS beat(16)11
Avg EPS beat(16)10.17%
Revenue beat(2)1
Avg Revenue beat(2)0.77%
Min Revenue beat(2)-0.57%
Max Revenue beat(2)2.11%
Revenue beat(4)2
Avg Revenue beat(4)-5.76%
Min Revenue beat(4)-25.44%
Max Revenue beat(4)2.11%
Revenue beat(8)3
Avg Revenue beat(8)-3.87%
Revenue beat(12)4
Avg Revenue beat(12)-3.03%
Revenue beat(16)6
Avg Revenue beat(16)-2.3%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)0%
EPS NY rev (1m)0%
EPS NY rev (3m)2.68%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.21%
Valuation
Industry RankSector Rank
PE 26.32
Fwd PE 21.19
P/S 2.66
P/FCF 16.59
P/OCF 10.98
P/B 2.62
P/tB N/A
EV/EBITDA 13.63
EPS(TTM)0.92
EY3.8%
EPS(NY)1.14
Fwd EY4.72%
FCF(TTM)1.46
FCFY6.03%
OCF(TTM)2.2
OCFY9.11%
SpS9.09
BVpS9.25
TBVpS-1.47
PEG (NY)0.95
PEG (5Y)1.16
Profitability
Industry RankSector Rank
ROA 7.22%
ROE 17.34%
ROCE 5.69%
ROIC 4.13%
ROICexc 5.25%
ROICexgc 17.26%
OM 12.23%
PM (TTM) 17.64%
GM 68.16%
FCFM 16.05%
ROA(3y)2.49%
ROA(5y)0.78%
ROE(3y)6.19%
ROE(5y)1.81%
ROIC(3y)3.2%
ROIC(5y)3.02%
ROICexc(3y)3.53%
ROICexc(5y)3.28%
ROICexgc(3y)11.83%
ROICexgc(5y)11.37%
ROCE(3y)4.6%
ROCE(5y)4.33%
ROICexcg growth 3Y3.08%
ROICexcg growth 5Y11.87%
ROICexc growth 3Y13.05%
ROICexc growth 5Y18.08%
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%
F-Score7
Asset Turnover0.41
Health
Industry RankSector Rank
Debt/Equity 0.86
Debt/FCF 5.49
Debt/EBITDA 3.84
Cap/Depr 78.79%
Cap/Sales 8.2%
Interest Coverage 3.21
Cash Conversion 107.09%
Profit Quality 90.98%
Current Ratio 2.34
Quick Ratio 2.23
Altman-Z 1.96
F-Score7
WACC7.61%
ROIC/WACC0.54
Cap/Depr(3y)80.99%
Cap/Depr(5y)73.85%
Cap/Sales(3y)8.7%
Cap/Sales(5y)7.71%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)12.2%
EPS 3Y15.98%
EPS 5Y22.74%
EPS Q2Q%6.06%
EPS Next Y27.83%
EPS Next 2Y21.02%
EPS Next 3Y22.04%
EPS Next 5Y10.95%
Revenue 1Y (TTM)-36.45%
Revenue growth 3Y-3.2%
Revenue growth 5Y-0.22%
Sales Q2Q%-17.78%
Revenue Next Year-18.79%
Revenue Next 2Y-7.32%
Revenue Next 3Y-2.88%
Revenue Next 5Y-0.75%
EBIT growth 1Y1.94%
EBIT growth 3Y7.06%
EBIT growth 5Y18.6%
EBIT Next Year86.15%
EBIT Next 3Y30.95%
EBIT Next 5Y15.23%
FCF growth 1Y367.07%
FCF growth 3Y56.46%
FCF growth 5Y60.54%
OCF growth 1Y31.01%
OCF growth 3Y25.74%
OCF growth 5Y19.02%