Primerica (PRI) AI Stock Analysis

• Market Cap: $8.69B
• Dividend Yield: 1.47%
• Average Volume (3M): 211.07K
• Price to Earnings (P/E): 19.2
• Beta (1Y): 0.91
• Revenue Growth: 10.06%
• EPS Growth: -13.72%
• Country: US
• Employees: 2,289
• Sector: Financial
• Sector Strength: 79
• Industry: Insurance - Life
• EPS (TTM): 13.70
• Shares Outstanding: 33,091,557
• 10 Day Avg. Volume: 259,301
• 30 Day Avg. Volume: 211,074
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.04
• Price to Cash Flow (P/CF): 8.70
• P/FCF Ratio: 8.70
• 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: $299.00
• Price Target Upside: 20.28% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7

Primerica's strong financial fundamentals, including no debt and robust income growth, are significant strengths. The positive earnings guidance and stable technical indicators further support the stock’s outlook. Valuation remains fair, though not particularly attractive, and increased expenses pose a potential risk.

Positive Factors

Business Model

PRI has a uniquely capital-light business model and stronger growth profile compared to life insurance peers.

Financial Performance

Sales of $3.3B were in-line with estimates and up 41% year-over-year, driven by strong demand for mutual funds, annuities, and managed account products.

Recruitment Growth

PRI has seen strong agent recruiting with 7% year-over-year agent growth, showcasing robust expansion of its sales force.

Negative Factors

Operating Margin

The reported operating margin of 21.3% was unfavorable compared to the 22.3% forecast, driven by higher expenses.

Term Life Insurance Earnings

Term Life Insurance earnings of $140 million were below the expectation of $146 million, indicating underperformance in this segment.

Valuation Concerns

PRI trades at a forward free cash flow yield closer to 6% versus its historical average of 7%, leading to a Market Perform rating.

Primerica Business Overview & Revenue Model

Company Description

Primerica, Inc., together with its subsidiaries, provides financial products to middle-income households in the United States and Canada. The company operates in four segments: Term Life Insurance; Investment and Savings Products; Senior Health; and Corporate and Other Distributed Products. The Term Life Insurance segment underwrites individual term life insurance products. The Investment and Savings Products segment provides mutual funds and various retirement plans, managed investments, variable and fixed annuities, and fixed indexed annuities. The Senior Health segment offers segregated funds; and medicare advantage and supplement products. The Corporate and Other Distributed Products segment provides mortgage loans; prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters; ID theft defense services; auto and homeowners' insurance; home automation solutions; and insurance products, including supplemental health, accidental death, and disability for small businesses. It distributes and sells its products through a network of 129,515 licensed sales representatives. Primerica, Inc. was founded in 1927 and is headquartered in Duluth, Georgia.

How the Company Makes Money

Primerica makes money through a multi-level marketing (MLM) business model where independent representatives sell financial products and services directly to consumers. The company's primary source of revenue comes from the sale of term life insurance policies. Representatives also earn commissions by selling investment and savings products such as mutual funds and annuities. Primerica further earns income through fees associated with the management and administration of investment products. Additionally, the company benefits from its large sales force, which helps expand its customer base and increase product sales. Key partnerships with financial institutions and investment management firms also contribute to its revenue streams by providing a range of products that Primerica representatives can offer to clients.

Primerica Financial Statement Overview

Summary

Primerica presents a strong financial position with solid income growth, a stable balance sheet, and excellent cash flow generation. The absence of debt enhances financial flexibility, though minor concerns exist regarding reduced total assets and equity. Positive income trends and strong cash flow support a positive outlook.

Income Statement

Primerica's income statement shows strong growth and profitability. The gross profit margin is consistently high, reflecting efficient cost management. The net profit margin for 2024 was robust, though there was a decrease in net income compared to 2023. Revenue growth has been positive, highlighting a strong upward trend. EBIT and EBITDA margins are healthy, indicating stable operational performance.

Balance Sheet

The balance sheet is solid, with no outstanding debt in 2024, which significantly strengthens the company's financial position. The equity ratio is stable, and ROE is strong, showcasing effective utilization of shareholder equity. However, the decrease in total assets and stockholders' equity from 2023 is a slight concern, though it is balanced by the reduction in liabilities.

Cash Flow

Cash flow is robust, with strong operating cash flow relative to net income, indicating good cash generation capabilities. Free cash flow growth is positive, supporting potential future investments or distributions. The cash flow statement reflects a consistent ability to generate cash efficiently, which is crucial for stability and future growth.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.09B	2.82B	2.72B	2.71B	2.22B
	Gross Profit
3.09B	2.48B	2.40B	2.41B	1.97B
	EBIT
720.13M	1.79B	526.02M	437.97M	445.66M
	EBITDA
720.13M	2.60B	681.39M	703.98M	553.27M
	Net Income Common Stockholders
470.52M	576.60M	373.01M	373.36M	386.16M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.63B	1.62B	3.05B	3.18B	3.01B
	Total Assets
14.58B	15.03B	15.35B	16.12B	14.91B
	Total Debt
1.95B	2.04B	2.08B	2.04B	1.77B
	Net Debt
-687.82M	1.43B	1.59B	1.65B	1.23B
	Total Liabilities
12.32B	12.96B	13.63B	14.03B	13.07B
	Stockholders Equity
2.26B	2.07B	1.72B	2.08B	1.84B
Cash Flow		Free Cash Flow
862.09M	658.62M	731.86M	632.27M	615.79M
	Operating Cash Flow
862.09M	692.52M	757.66M	656.96M	643.42M
	Investing Cash Flow
-232.25M	-90.05M	-200.05M	-923.38M	-53.53M
	Financing Cash Flow
-551.14M	-479.62M	-457.85M	107.97M	-301.79M

Primerica Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 248.59
• 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 PRI, the sentiment is Negative. The current price of 248.59 is below the 20-day moving average (MA) of 278.03, below the 50-day MA of 281.45, and below the 200-day MA of 270.83, indicating a bearish trend. The MACD of 1.16 indicates Negative momentum. The RSI at 53.10 is Neutral, neither overbought nor oversold. The STOCH value of 27.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRI.

Primerica Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRI	78 Outperform	$8.69B	19.24	23.10%	1.47%	10.06%	-13.72%
GL	77 Outperform	$10.21B	10.27	21.87%	0.85%	6.07%	17.69%
JXN	76 Outperform	$5.17B	6.06	9.49%	4.11%	3.55%	8.91%
UNM	75 Outperform	$13.59B	8.13	17.26%	2.31%	4.03%	45.42%
FG	70 Outperform	$4.91B	7.67	18.12%	2.46%	27.35%	―
LNC	68 Neutral	$5.09B	1.62	43.24%	6.22%	47.95%	―
Sector *	64 Neutral	$13.44B	9.41	9.19%	4.92%	16.30%	-8.66%

Primerica Corporate Events

Primerica Reports Strong Q4 2024 Financial Results

Primerica reported strong financial results for the fourth quarter of 2024, with total revenues increasing by 12% to $788.1 million and net income from continuing operations rising by 9% to $167.7 million compared to the previous year. The company experienced significant growth in its life-licensed sales force and investment and savings products, with ISP sales up 41% and client asset values growing by 16%. This momentum reflects Primerica’s successful recruiting and licensing efforts, as well as favorable equity market conditions, positioning the company for continued success and shareholder value.