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Primerica (PRI)
NYSE:PRI
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Primerica
(NYSE:PRI)78Outperform
Positive Factors
Agent Recruiting
PRI has seen strong agent recruiting with 7% year-over-year agent growth.
Financial Performance
Earnings for Investments & Savings of $82 million were well above consensus of $78 million.
Negative Factors
Operating Margin
The reported operating margin of 21.3% was unfavorable compared to the forecast driven by higher expenses.
Primerica (PRI) vs. S&P 500 (SPY)
Market Cap
$9.68B
Dividend Yield1.24%
Average Volume (3M)141.53K
Price to Earnings (P/E)21.2
Beta (1Y)0.93
Revenue Growth10.06%
EPS Growth-13.72%
CountryUS
Employees3,450
SectorFinancial
Sector Strength93
IndustryInsurance
Share Statistics
EPS (TTM)13.70
Shares Outstanding33,250,713
10 Day Avg. Volume145,055
30 Day Avg. Volume141,531
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.18
Price to Cash Flow (P/CF)11.70
P/FCF Ratio11.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$309.50Price Target Upside9.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Primerica Business Overview & Revenue Model
Company DescriptionPrimerica, Inc. is a leading financial services company based in the United States, primarily focused on serving middle-income families. The company operates in the financial services sector, providing a range of products including term life insurance, mutual funds, annuities, and other financial products. Primerica's core mission is to help families become properly protected, debt-free, and financially independent through its network of trained representatives.
How the Company Makes MoneyPrimerica 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. With no debt as of 2024, its financial flexibility is enhanced. Minor concerns about reduced total assets and equity are balanced by improved cash and profit margins.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.85
Very Positive
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.78
Positive
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.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.08B | 3.09B | 2.82B | 2.72B | 2.71B | 2.22B | Gross Profit |
| 2.72B | 3.09B | 2.48B | 2.40B | 2.41B | 1.97B | EBIT |
| 1.11B | 720.13M | 1.79B | 526.02M | 437.97M | 445.66M | EBITDA |
| 550.88M | 720.13M | 2.60B | 681.39M | 703.98M | 553.27M | Net Income Common Stockholders |
| 455.38M | 470.52M | 576.60M | 373.01M | 373.36M | 386.16M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.63B | 3.63B | 1.62B | 3.05B | 3.18B | 3.01B | Total Assets |
| 14.58B | 14.58B | 15.03B | 15.35B | 16.12B | 14.91B | Total Debt |
| 1.95B | 1.95B | 2.04B | 2.08B | 2.04B | 1.77B | Net Debt |
| -687.82M | -687.82M | 1.43B | 1.59B | 1.65B | 1.23B | Total Liabilities |
| 12.32B | 12.32B | 12.96B | 13.63B | 14.03B | 13.07B | Stockholders Equity |
| 2.26B | 2.26B | 2.07B | 1.72B | 2.08B | 1.84B |
| Cash Flow | Free Cash Flow | ||||
| 770.43M | 862.09M | 658.62M | 731.86M | 632.27M | 615.79M | Operating Cash Flow |
| 817.35M | 862.09M | 692.52M | 757.66M | 656.96M | 643.42M | Investing Cash Flow |
| -183.82M | -232.25M | -90.05M | -200.05M | -923.38M | -53.53M | Financing Cash Flow |
| -567.60M | -551.14M | -479.62M | -457.85M | 107.97M | -301.79M |
Primerica Technical Analysis
Neutral
281.70
Price Trends
281.36
Positive
283.57
Negative
263.58
Positive
Market Momentum
-0.47
Negative
47.74
Neutral
69.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRI, the sentiment is Neutral. The current price of 281.7 is below the 20-day moving average (MA) of 284.29, above the 50-day MA of 281.36, and above the 200-day MA of 263.58, indicating a neutral trend. The MACD of -0.47 indicates Negative momentum. The RSI at 47.74 is Neutral, neither overbought nor oversold. The STOCH value of 69.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRI.
Primerica Risk Analysis
Primerica disclosed 45 risk factors in its most recent earnings report. Primerica reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Primerica Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $9.68B | 21.25 | 20.83% | 1.24% | 10.06% | -13.72% | |
74 Outperform | $59.84B | 11.36 | 20.86% | 1.89% | 1.21% | 24.08% | |
72 Outperform | $20.08B | 13.34 | 14.17% | 3.21% | 18.02% | 171.70% | |
67 Neutral | $6.11B | 1.95 | 39.61% | 4.75% | 47.95% | ― | |
65 Neutral | $55.56B | 13.72 | 16.13% | 2.54% | 6.10% | 225.22% | |
64 Neutral | $14.34B | 10.61 | 9.28% | 4.07% | 18.04% | -9.54% | |
61 Neutral | $38.79B | 14.61 | 9.78% | 4.63% | 34.25% | 11.22% |
* Financial Sector Average
Performance Comparison
PRI
Primerica
281.70
36.71
14.98%
AFL
AFLAC
107.60
28.42
35.89%
LNC
Lincoln National
35.88
11.03
44.39%
MET
Metlife
81.56
13.12
19.17%
PFG
Principal Financial
85.62
7.39
9.45%
PRU
Prudential Financial
109.59
5.39
5.17%
Primerica Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -2.55% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong financial growth and performance in investment and savings products alongside challenges related to operating expenses and cost of living pressures affecting life insurance sales. Favorable mortality trends and solid revenue growth were positive indicators, but these were somewhat offset by increased expenses and a remeasurement loss.Highlights
Record-Breaking Revenue and Growth
Primerica achieved $3 billion in revenue for the first time, with full-year adjusted net operating income increasing by 14% and adjusted operating income per share increasing by 20%.
Strong Investment and Savings Product Segment Performance
Fourth quarter revenues increased by 29%, with pre-tax income rising by 31%. Sales-based revenues grew by 42%, driven by favorable equity market conditions and strong demand for investment solutions.
Stable Mortality Rates
The company experienced favorable mortality trends in both the US and Canada, contributing positively to financial performance.
Lowlights
Higher Operating Expenses
Fourth quarter consolidated insurance and other operating expenses rose by 13% year over year, driven by variable costs such as higher employee incentive compensation and technology investments.
Impact of Cost of Living on Life Insurance Sales
Cost of living pressures led to higher lapses and constrained growth in life insurance sales, with a 4% revenue increase in the term life segment and a slight increase in issued policies.
Remeasurement Loss in Benefits and Claims
A $4.2 million remeasurement loss was recognized due to a refinement in the actuarial model, affecting the benefits and claims ratio.
Company Guidance
During Primerica's fourth quarter 2024 earnings call, the company provided guidance for 2025, indicating an expectation of 5% growth in annualized premium (ADP) for the term life segment. The benefits and claims ratio is projected to remain stable at around 58%, while the DAC amortization and insurance commissions ratio is expected to stay consistent at approximately 12%. The operating margin is anticipated to be around 22% for the full year, despite some variability due to seasonality in insurance expenses. For the investment and savings product segment, Primerica expects to continue benefiting from favorable equity market conditions and strong demand for investment solutions, with significant contributions from variable annuity sales. Overall, the company projects consolidated insurance and other operating expenses to increase by around $40 million, or 6% to 8%, in 2025, driven by growth in business operations, higher employee staffing costs, and increased technology investments.Primerica Corporate Events
Financial Disclosures
Primerica Reports Strong Q4 2024 Financial Results
Positive
Feb 11, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.