Persimmon (PSN) AI Stock Analysis

• Market Cap: £3.49B
• Dividend Yield: 5.04%
• Average Volume (3M): 1.19M
• Price to Earnings (P/E): 13.4
• Beta (1Y): 1.48
• Revenue Growth: 16.74%
• EPS Growth: -0.16%
• Country: UK
• Employees: 4,731
• Sector: Consumer Cyclical
• Sector Strength: 75
• Industry: Residential Construction
• EPS (TTM): 0.36
• Shares Outstanding: 320,395,000
• 10 Day Avg. Volume: 1,131,934
• 30 Day Avg. Volume: 1,185,661
• PEG Ratio: 2.87
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 72.79
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £1,462.00
• Price Target Upside: 34.25% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 68 Neutral
• Price Target: 1,238.00p ▲(13.68% Upside)

Persimmon's overall stock score reflects strong financial stability and positive corporate events, offset by weak technical indicators. The stock is fairly valued with an attractive dividend yield, but bearish momentum suggests caution. The company's strategic moves and financial health position it well for future growth, though operational efficiency improvements are needed.

Positive Factors

Revenue Growth

The positive revenue growth trend indicates a recovery and expansion in market reach, supporting long-term business sustainability.

Balance Sheet Strength

A debt-free balance sheet enhances financial stability, providing flexibility for strategic investments and resilience against market fluctuations.

Strategic Divestment

The divestment allows Persimmon to focus on core operations, improving operational efficiency and financial flexibility for future growth.

Negative Factors

Operational Efficiency

Challenges in operational efficiency could hinder profit margins and long-term competitiveness if not addressed.

Cash Generation Efficiency

Limited cash generation relative to net income may restrict the company's ability to fund growth initiatives and manage financial obligations.

Declining Return on Equity

A declining return on equity indicates potential inefficiencies in using shareholder funds, which could affect investor confidence and future capital raising.

Persimmon Business Overview & Revenue Model

Company Description

Persimmon Plc (PSN) is a leading UK-based housebuilding company primarily engaged in the construction and sale of residential properties. Founded in 1972, the company operates in the housing sector, focusing on the development of new homes across various regions in the UK. Persimmon offers a diverse range of properties, including apartments, family homes, and luxury residences, catering to various market segments. The company is recognized for its commitment to quality and customer satisfaction, often emphasizing energy-efficient and sustainable building practices.

How the Company Makes Money

Persimmon generates revenue primarily through the sale of residential properties. The company operates through a number of regional divisions that manage the development and sale of homes, enabling it to cater to local housing demands effectively. Key revenue streams include the sale of newly built homes, which are sold to private buyers, housing associations, and investors. Additionally, Persimmon earns income from land sales and joint ventures with other developers or local authorities. The company's strong brand reputation, strategic land acquisitions, and a focus on customer experience further contribute to its profitability. Significant partnerships, such as collaborations with local councils for affordable housing projects, also play a role in securing revenue and enhancing community relations.

Persimmon Financial Statement Overview

Summary

Persimmon shows a recovery in revenue and profit margins in 2024, indicating positive growth. The balance sheet is robust with no debt, ensuring financial stability. Cash flows have improved, but cash generation efficiency needs enhancement. Overall, the financial health is good with room for operational improvements.

Income Statement

The income statement reveals a fluctuating revenue trend with a recent rebound in 2024 to 3.2 billion from 2.77 billion in 2023. Gross profit margin is moderately healthy at 18.1% for 2024. However, the absence of EBIT in 2024 indicates a potential operational challenge. Net profit margin improved slightly to 8.3% in 2024. Revenue growth is positive at 15.4% from 2023 to 2024, indicating recovery. Overall, profitability is stabilizing, but operational efficiency needs attention.

Balance Sheet

The balance sheet remains strong with a solid equity base of 3.51 billion and no total debt in 2024, reflecting financial stability. The equity ratio of 72.5% signifies strong asset backing. Return on equity is satisfactory at 7.6% for 2024, though it shows a decline over the years. The debt-to-equity ratio is excellent at 0, eliminating leverage risk.

Cash Flow

Cash flow analysis indicates an improvement in operating cash flow to 84.9 million in 2024 from negative in 2023. Free cash flow returned to positive territory at 52.6 million. The operating cash flow to net income ratio is 0.32, suggesting adequate cash generation relative to net income. Free cash flow to net income ratio is low at 0.20, pointing to potential cash management challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.39B	3.20B	2.77B	3.82B	3.61B	3.33B
Gross Profit	563.40M	580.40M	795.10M	867.50M	1.08B	894.40M
EBITDA	395.70M	393.00M	381.00M	738.20M	973.50M	799.30M
Net Income	256.40M	267.10M	255.40M	561.00M	787.20M	638.40M
Balance Sheet
Total Assets	4.99B	4.83B	4.79B	5.03B	4.79B	4.62B
Cash, Cash Equivalents and Short-Term Investments	123.00M	258.60M	420.10M	861.60M	1.25B	1.23B
Total Debt	187.90M	453.60M	392.70M	498.00M	436.90M	362.60M
Total Liabilities	1.51B	1.33B	1.37B	1.59B	1.17B	1.10B
Stockholders Equity	3.48B	3.51B	3.42B	3.44B	3.63B	3.52B
Cash Flow
Free Cash Flow	-33.80M	52.60M	-166.20M	371.80M	763.90M	746.60M
Operating Cash Flow	10.70M	84.90M	-129.80M	402.30M	784.80M	765.50M
Investing Cash Flow	-39.70M	-45.00M	-42.90M	-29.80M	-18.20M	-18.10M
Financing Cash Flow	-198.20M	-201.40M	-268.80M	-757.50M	-754.10M	-357.20M

Persimmon Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1089.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:PSN, the sentiment is Negative. The current price of 1089 is below the 20-day moving average (MA) of 1090.67, below the 50-day MA of 1142.33, and below the 200-day MA of 1194.16, indicating a bearish trend. The MACD of -18.87 indicates Negative momentum. The RSI at 45.32 is Neutral, neither overbought nor oversold. The STOCH value of 66.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:PSN.

Persimmon Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKG	72 Outperform	£3.48B	9.68	10.73%	6.80%	0.90%	-4.04%
PSN	68 Neutral	£3.49B	13.42	7.44%	5.04%	16.74%	-0.16%
TW	66 Neutral	£3.44B	40.53	1.97%	9.65%	4.21%	-65.57%
Sector *	61 Neutral	$18.09B	12.97	-1.60%	2.98%	1.42%	-15.92%
BWY	60 Neutral	£2.74B	18.48	4.22%	2.54%	-11.63%	-31.81%
VTY	60 Neutral	£1.89B	28.23	-0.31%	―	-0.57%	-104.08%
BTRW	57 Neutral	£5.17B	34.78	1.81%	4.70%	4.78%	-53.59%

Persimmon Corporate Events

Persimmon Director Increases Stake with Share Purchase

Anand Aithal, a Non-Executive Director at Persimmon Plc, recently purchased a total of 1,000 shares in the company, with transactions executed at prices of £10.76 and £10.72 per share. This move is part of the company’s regulatory disclosure requirements and may indicate confidence in the company’s market position and future prospects.

The most recent analyst rating on (GB:PSN) stock is a Hold with a £14.80 price target. To see the full list of analyst forecasts on Persimmon stock, see the GB:PSN Stock Forecast page.