TSX:PRMW

Stock Analysis Report

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Market Cap

CA$3.4b

Last Updated

2021/06/18 03:13 UTC

Data Sources

Company Financials +

Executive Summary

Primo Water Corporation provides water direct to consumers and water filtration services in North America, Europe, and Israel. More Details

Rewards

Trading at 29.6% below our estimate of its fair value

Earnings are forecast to grow 35.06% per year

Risk Analysis

No risks detected for PRMW from our risk checks.


Snowflake Analysis

Mediocre balance sheet with moderate growth potential.


Similar Companies

Share Price & News

How has Primo Water's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PRMW is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: PRMW's weekly volatility (3%) has been stable over the past year.


Market Performance


7 Day Return

-3.4%

PRMW

-1.8%

CA Beverage

-0.9%

CA Market


1 Year Return

10.6%

PRMW

18.6%

CA Beverage

34.7%

CA Market

Return vs Industry: PRMW underperformed the Canadian Beverage industry which returned 24.7% over the past year.

Return vs Market: PRMW underperformed the Canadian Market which returned 35.4% over the past year.


Shareholder returns

PRMWIndustryMarket
7 Day-3.4%-1.8%-0.9%
30 Day-1.2%2.3%1.5%
90 Day-0.3%2.1%4.8%
1 Year12.3%10.6%20.6%18.6%39.1%34.7%
3 Year-1.2%-6.0%-9.5%-14.9%30.3%17.9%
5 Year14.7%5.5%4.1%-5.8%58.9%34.9%

Long-Term Price Volatility Vs. Market

How volatile is Primo Water's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Primo Water undervalued compared to its fair value and its price relative to the market?

32.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PRMW (CA$21.17) is trading below our estimate of fair value (CA$30.07)

Significantly Below Fair Value: PRMW is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PRMW is unprofitable, so we can't compare its PE Ratio to the North American Beverage industry average.

PE vs Market: PRMW is unprofitable, so we can't compare its PE Ratio to the Canadian market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate PRMW's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: PRMW is overvalued based on its PB Ratio (2.1x) compared to the CA Beverage industry average (2x).


Future Growth

How is Primo Water forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

35.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PRMW is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.5%).

Earnings vs Market: PRMW is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: PRMW's is expected to become profitable in the next 3 years.

Revenue vs Market: PRMW's revenue (4.3% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: PRMW's revenue (4.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PRMW's Return on Equity is forecast to be low in 3 years time (7.2%).


Past Performance

How has Primo Water performed over the past 5 years?

-38.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PRMW is currently unprofitable.

Growing Profit Margin: PRMW is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: PRMW is unprofitable, and losses have increased over the past 5 years at a rate of 38.6% per year.

Accelerating Growth: Unable to compare PRMW's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: PRMW is unprofitable, making it difficult to compare its past year earnings growth to the Beverage industry (26.6%).


Return on Equity

High ROE: PRMW has a negative Return on Equity (-10.44%), as it is currently unprofitable.


Financial Health

How is Primo Water's financial position?


Financial Position Analysis

Short Term Liabilities: PRMW's short term assets ($435.6M) do not cover its short term liabilities ($536.8M).

Long Term Liabilities: PRMW's short term assets ($435.6M) do not cover its long term liabilities ($1.7B).


Debt to Equity History and Analysis

Debt Level: PRMW's debt to equity ratio (108.6%) is considered high.

Reducing Debt: PRMW's debt to equity ratio has reduced from 203.8% to 108.6% over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable PRMW has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: PRMW is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 6.5% per year.


Dividend

What is Primo Water current dividend yield, its reliability and sustainability?

1.44%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: PRMW's dividend (1.38%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.56%).

High Dividend: PRMW's dividend (1.38%) is low compared to the top 25% of dividend payers in the Canadian market (4.47%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PRMW has been paying a dividend for less than 10 years.

Growing Dividend: PRMW's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: PRMW is paying a dividend but the company is unprofitable.


Future Payout to Shareholders

Future Dividend Coverage: PRMW's dividends in 3 years are forecast to be well covered by earnings (35.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure


CEO

Tom Harrington (62 yo)

2.5yrs

Tenure

US$6,999,545

Compensation

Mr. Thomas J. Harrington, also known as Tom, has been Chief Executive Officer and Director at Primo Water Corporation (formerly known as Cott Corporation) since December 30, 2018 and is its President. and ...


CEO Compensation Analysis

Compensation vs Market: Tom's total compensation ($USD7.00M) is above average for companies of similar size in the Canadian market ($USD3.04M).

Compensation vs Earnings: Tom's compensation has increased whilst the company is unprofitable.


Leadership Team

Experienced Management: PRMW's management team is considered experienced (2.3 years average tenure).


Board Members

Experienced Board: PRMW's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: PRMW insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Primo Water Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Primo Water Corporation
  • Ticker: PRMW
  • Exchange: TSX
  • Founded: NaN
  • Industry: Soft Drinks
  • Sector: Food, Beverage & Tobacco
  • Market Cap: CA$3.411b
  • Shares outstanding: 161.13m
  • Website: https://primowatercorp.com

Number of Employees


Location

  • Primo Water Corporation
  • 4221 West Boy Scout Boulevard
  • Suite 400
  • Tampa
  • Florida
  • 33607
  • United States

Listings


Biography

Primo Water Corporation provides water direct to consumers and water filtration services in North America, Europe, and Israel. The company offers bottled water, purified and spring bottled water, self-serv...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/18 03:13
End of Day Share Price2021/06/17 00:00
Earnings2021/04/03
Annual Earnings2021/01/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.