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Primo Water Corp PRMW

Morningstar Rating
$15.29 +0.10 (0.66%)
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Company Report

Primo Water Earnings: A Leaner Business Bolsters Margin Profile, While Fierce Competition Remains

Considering a strong finish to fiscal 2023 and an enhanced margin profile from the sale of a significant portion of its international business (about 24% of fiscal 2022 revenue), we plan to raise our USD 16.10 and CAD 21.70 fair value estimates for no-moat Primo by a high-single-digit percentage. With shares trading near the range we’d consider fairly valued, we recommend investors await a wider margin of safety.

Price vs Fair Value

PRMW is trading at a 5% discount.
Price
$15.29
Fair Value
$34.80
Uncertainty
Medium
1-Star Price
$49.28
5-Star Price
$54.18
Economic Moat
Pblvy
Capital Allocation
Yymhswwhq

Bulls Say, Bears Say

Bulls

As a pure-play large-format water solutions provider, Primo Water should benefit as residential and business clients seek better-quality water amid rising wellness awareness and concerns about municipal water.

Bears

Primo Water competes in the commoditized water market where a lack of differentiation results in low entry barriers and intense competition.

Is it the right time to buy, sell, or hold?
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News

Trading Information

Previous Close Price
$15.19
Day Range
$14.1015.66
52-Week Range
$12.2716.19
Bid/Ask
$14.00 / $17.50
Market Cap
$2.44 Bil
Volume/Avg
2.7 Mil / 807,024

Key Statistics

Price/Earnings (Normalized)
17.45
Price/Sales
1.04
Dividend Yield (Trailing)
2.09%
Dividend Yield (Forward)
2.35%
Total Yield
3.37%

Company Profile

Primo Water is a pure-play water provider with a variety of products and services, including water delivery, exchange, refill/filtration, and water dispensers in 21 countries, mostly in North America and Europe. The firm usually initiates the customer relationship with the sale of water dispensers, and then generates recurring revenue via the water direct and exchange services (two thirds of total sales) by delivering large-format (typically three gallons or greater) water bottles to residential and commercial customers for use atop or inside the dispensers. Primo generates 75% of revenue and all its profits in North America, while its European operation has yet to turn a profit.
Sector
Consumer Defensive
Industry
Beverages - Non-Alcoholic
Stock Style Box
Small Core
Total Number of Employees
9,240

Competitors

Valuation

Metric
PRMW
KO
Price/Earnings (Normalized)
17.4522.37
Price/Book Value
1.839.84
Price/Sales
1.045.62
Price/Cash Flow
6.9020.67
Price/Earnings
PRMW
KO

Financial Strength

Metric
PRMW
KO
Quick Ratio
0.600.72
Current Ratio
0.841.13
Interest Coverage
3.078.89
Quick Ratio
PRMW
KO

Profitability

Metric
PRMW
KO
Return on Assets (Normalized)
3.48%12.05%
Return on Equity (Normalized)
9.95%45.69%
Return on Invested Capital (Normalized)
6.15%17.60%
Return on Assets
PRMW
KO
See how this stock stacks up to its competitors with Morningstar Investor

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