Primo Water Corporation (PRMW) Stock Fundamental Analysis
NYSE:PRMW - New York Stock Exchange, Inc. - CA74167P1080 - Common Stock - Currency: USD
Taking everything into account, PRMW scores 5 out of 10 in our fundamental rating. PRMW was compared to 31 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 has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year PRMW was profitable.
PRMW had a positive operating cash flow in the past year.
In multiple years PRMW reported negative net income over the last 5 years.
Each year in the past 5 years PRMW had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 7.22%, PRMW is in the better half of 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.
PRMW has a worse Return On Invested Capital (4.13%) 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 13.34%.
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.
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.
PRMW's Gross Margin of 68.16% is amongst the best of the industry. PRMW outperforms 100.00% of its industry peers.
PRMW's Gross Margin has improved in the last couple of years.
| 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
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.
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.
With a Altman-Z score value of 1.96, PRMW perfoms like the industry average, 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.
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
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.
The Current ratio of PRMW (2.34) is better than 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 has a better Quick ratio (2.23) than 90.91% of its industry peers.
| 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.
Looking at the last year, PRMW shows a very negative growth in Revenue. The Revenue has decreased by -36.45% in the last year.
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
Based on estimates for the next years, PRMW will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.95% on average per year.
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
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of 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.
PRMW's Price/Earnings is on the same level as the industry average.
PRMW is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 29.63, which is the current average of the S&P500 Index.
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 22.68, 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.
PRMW's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PRMW is cheaper than 84.85% of the companies in the same industry.
| 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.
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%
5. Dividend
5.1 Amount
PRMW has a Yearly Dividend Yield of 1.34%.
PRMW's Dividend Yield is comparable with the industry average which is at 3.25.
Compared to an average S&P500 Dividend Yield of 2.27, PRMW's dividend is way lower than the S&P500 average.
| 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 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
22.12% of the earnings are spent on dividend by PRMW. This is a low number and 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%
24.21
-0.23 (-0.94%)
Chartmill FA Rating
GICS SectorConsumer Staples
GICS IndustryGroupFood, Beverage & Tobacco
GICS IndustryBeverages
Earnings (Last)
Earnings (Next)
Inst Owners89.04%
Inst Owner Change-99.69%
Ins Owners2.23%
Ins Owner Change-108%
Market Cap3.88B
Analysts82.86
Price Target17.35 (-28.34%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector 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 Rank | Sector 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 Rank | Sector 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 Rank | Sector 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%