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 only an average score on both its financial health and profitability. PRMW is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year PRMW was profitable.
- In the past year PRMW had a positive cash flow from operations.
- 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.
- PRMW's Return On Equity of 17.34% is fine compared to the rest of the industry. PRMW outperforms 63.64% of its industry peers.
- 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 Profit Margin of 17.64%. This is amongst the best in 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.
- In the last couple of years the Operating Margin of PRMW has grown nicely.
- PRMW has a Gross Margin of 68.16%. This is amongst the best in the industry. PRMW outperforms 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
- 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.
- 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.
- 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.
- PRMW has a Debt/Equity ratio of 0.86. This is a neutral value indicating 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.
- 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'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
- 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
- Measured over the past years, PRMW shows a decrease in Revenue. The Revenue has been decreasing by -0.22% on average per year.
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.
- 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
- A Price/Earnings ratio of 26.32 indicates a quite expensive valuation of PRMW.
- 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.
- A Price/Forward Earnings ratio of 21.19 indicates a rather expensive valuation of PRMW.
- PRMW's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. PRMW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.32 | ||
| Fwd PE | 21.19 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PRMW is valued a bit cheaper than 60.61% of the companies in the same industry.
- Based on the Price/Free Cash Flow ratio, PRMW is valued 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
- 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%
5. Dividend
5.1 Amount
- PRMW has a Yearly Dividend Yield of 1.34%. Purely for dividend investing, there may be better candidates out there.
- Compared to an average industry Dividend Yield of 1.72, PRMW has a dividend in line with its industry peers.
- PRMW's Dividend Yield is slightly below the S&P500 average, which is at 1.81.
| 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.