Primo Water Corporation (PRMW) Stock Fundamental Analysis

USA • New York Stock Exchange • NYSE:PRMW • CA74167P1080

24.21 USD
-0.23 (-0.94%)
At close: Nov 8, 2024
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 33 industry peers in the Beverages industry. PRMW has only an average score on both its financial health and profitability. PRMW has a valuation in line with the averages, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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.
  • In multiple years PRMW reported negative net income over the last 5 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 2016 2017 2018 2019 2020 2021 2022 2023 0 100M -100M 200M 300M

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.
  • 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.
  • PRMW had an Average Return On Invested Capital over the past 3 years of 3.20%. This is significantly below the industry average of 11.45%.
  • The 3 year average ROIC (3.20%) for PRMW is below the current ROIC(4.13%), indicating increased profibility in the last year.
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 2016 2017 2018 2019 2020 2021 2022 2023 0 10 20 30

1.3 Margins

  • Looking at the Profit Margin, with a value of 17.64%, PRMW belongs to the top of the industry, outperforming 81.82% of the companies in the same industry.
  • In the last couple of years the Profit Margin of PRMW has declined.
  • PRMW's Operating Margin of 12.23% is on the low side compared to the rest of the industry. PRMW is outperformed by 63.64% of its industry peers.
  • PRMW's Operating Margin has improved in the last couple of years.
  • 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 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 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.
  • The number of shares outstanding for PRMW remains at a similar level compared to 1 year ago.
  • The debt/assets ratio for PRMW has been reduced compared to a year ago.
PRMW Yearly Shares OutstandingPRMW Yearly Shares OutstandingYearly Shares Outstanding 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 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.
  • 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.
  • 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.
  • The Debt to FCF ratio of PRMW (5.49) is better 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.
  • PRMW has a Debt to Equity ratio of 0.86. This is comparable to the rest of the industry: PRMW outperforms 45.45% of its industry peers.
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 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

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.
  • 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.
  • 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 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M 800M

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3

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.
  • 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

  • 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

  • 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.
PRMW Yearly Revenue VS EstimatesPRMW Yearly Revenue VS EstimatesYearly Revenue VS Estimates 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 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

  • The Price/Earnings ratio is 26.32, which means the current valuation is very expensive for PRMW.
  • PRMW's Price/Earnings ratio is in line with the industry average.
  • Compared to an average S&P500 Price/Earnings ratio of 28.41, PRMW is valued at the same level.
  • 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 (25.64), 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.
  • Based on the Price/Free Cash Flow ratio, PRMW is valued cheaper than 84.85% of the companies in the same industry.
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.
  • 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%

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6

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 1.74, PRMW has a dividend in line with its industry peers.
  • Compared to the average S&P500 Dividend Yield of 1.83, PRMW is paying slightly less dividend.
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 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
PRMW Yearly Dividends per sharePRMW Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 0.2 0.4 0.6 0.8 1

5.3 Sustainability

  • 22.12% of the earnings are spent on dividend by PRMW. This is a low number and 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 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 / 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.