Perimeter Solutions (PRM) AI Stock Analysis

• Market Cap: $1.52B
• Dividend Yield: N/A
• Average Volume (3M): 1.24M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: 74.16%
• EPS Growth: -112.26%
• Country: US
• Employees: 319
• Sector: Basic Materials
• Sector Strength: 64
• Industry: Chemicals - Specialty
• EPS (TTM): -0.15
• Shares Outstanding: 148,775,590
• 10 Day Avg. Volume: 844,895
• 30 Day Avg. Volume: 1,240,187
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 8.40
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $16.00
• Price Target Upside: 56.56% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Perimeter Solutions demonstrates strong revenue growth and effective strategic initiatives, as seen in its improved EBITDA and share repurchase program. However, it faces significant challenges in achieving profitability and managing operational costs, reflected in its negative P/E ratio and increased capital expenditures. Technical indicators suggest short-term strength, but valuation concerns temper the overall outlook.

Positive Factors

Competitor Exit

Plans to cease operations by a looming competitor for PRM's Retardant business led to a significant share price increase.

Earnings Potential

PRM's operating model has delivered nearly $120M higher EBITDA over a period of similar acres burned, increasing earnings power and leading to increased free cash flow and lower leverage.

Market Leadership

PRM is a leader in fire retardants used to fight wildfires, which should catalyze growth in PRM’s volumes and provide more firepower to PRM’s earnings algorithm.

Negative Factors

Competition Risk

Concerns about competition risk from a new US Retardant competitor weighed on PRM shares for an extended period.

Perimeter Solutions Business Overview & Revenue Model

Company Description

Perimeter Solutions, SA manufactures and supplies firefighting products and lubricant additives in the United States, Germany, and internationally. It operates in two segments, Fire Safety and Oil Additives. The Fire Safety segment provides fire retardants and firefighting foams, as well as specialized equipment and services for federal, state, provincial, local/municipal, and commercial customers. The Oil Additives segment produces Phosphorus Pentasulfide which is primarily used in the preparation of lubricant additives, including a family of compounds called Zinc Dialkyldithiophosphates. The company offers its products under the brands PHOS-CHEK, FIRE-TROL, AUXQUIMIA, SOLBERG. and BIOGEMA. Perimeter Solutions, SA was founded in 1963 and is headquartered in Clayton, Missouri.

How the Company Makes Money

Perimeter Solutions generates revenue through the sale of its fire safety and oil additives products. The company's key revenue streams include contracts with government agencies for fire retardant products used in wildfire suppression, as well as sales of firefighting foams to industrial and commercial clients for fire prevention and control. Additionally, Perimeter Solutions earns income from its oil additives division, which provides specialty chemicals that enhance fuel performance, thereby appealing to a wide range of industries including automotive and aviation. Significant partnerships with government bodies and large industrial clients contribute to the company's stable revenue base and growth potential.

Perimeter Solutions Financial Statement Overview

Summary

Perimeter Solutions shows a mixed financial performance with strong revenue growth but challenges in profitability and cash flow efficiency. The company benefits from low leverage, providing a stable financial base, yet it must address operational inefficiencies and improve cash flow from operations to enhance overall financial health.

Income Statement

The income statement reveals fluctuating revenue with a significant increase in 2024, but consistent negative EBIT and net income in recent years indicate challenges in achieving profitability. The gross profit margin in 2024 was 56.54%, reflecting efficient production, but a negative net profit margin of -15.66% underscores the company's struggle with operational costs.

Balance Sheet

Perimeter Solutions maintains a strong equity position with a debt-to-equity ratio of 0.02 in 2024, indicating low leverage. However, the equity ratio stood at 47.90%, suggesting a balanced use of equity and liabilities. The return on equity has been declining, with a negative ROE in 2024 due to losses, which may concern investors.

Cash Flow

The cash flow statement shows improving free cash flow in 2024, moving from negative in previous years, indicating better cash management. The operating cash flow to net income ratio of 0.06 in 2024 suggests low efficiency in converting revenue to cash flow. The company needs to further improve cash generation from operations.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
560.97M	322.11M	360.50M	362.34M	339.58M
	Gross Profit
317.09M	138.85M	142.65M	113.06M	162.04M
	EBIT
-3.77M	94.45M	130.06M	-600.13M	71.48M
	EBITDA
-3.77M	173.07M	211.01M	-546.68M	134.87M
	Net Income Common Stockholders
-5.91M	67.49M	91.76M	-661.52M	24.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
198.46M	52.80M	126.75M	225.55M	22.48M
	Total Assets
2.42B	2.32B	2.46B	2.59B	1.14B
	Total Debt
21.55M	689.70M	684.30M	664.13M	687.27M
	Net Debt
-176.90M	642.42M	557.55M	438.57M	664.79M
	Total Liabilities
1.26B	1.16B	1.32B	1.50B	846.78M
	Stockholders Equity
1.16B	1.15B	1.14B	1.09B	291.42M
Cash Flow		Free Cash Flow
5.47M	-9.24M	-48.78M	62.60M	63.33M
	Operating Cash Flow
5.47M	193.00K	-40.17M	72.35M	70.83M
	Investing Cash Flow
20.57M	-14.89M	-10.25M	-1.23B	-9.47M
	Financing Cash Flow
8.35M	-64.45M	-48.81M	-761.43M	-45.61M

Perimeter Solutions Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 10.22
• 50DMA: Positive
• 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 PRM, the sentiment is Neutral. The current price of 10.22 is above the 20-day moving average (MA) of 9.91, above the 50-day MA of 9.80, and below the 200-day MA of 11.56, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 54.31 is Neutral, neither overbought nor oversold. The STOCH value of 78.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PRM.

Perimeter Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SCL	67 Neutral	$1.21B	21.79	4.65%	2.84%	-0.16%	47.70%
KWR	65 Neutral	$1.87B	16.29	8.49%	1.77%	-5.82%	3.75%
MTX	64 Neutral	$1.67B	11.37	-1.45%	0.80%	-3.82%	-126.04%
CC	56 Neutral	$1.82B	21.30	12.98%	8.08%	-4.05%	―
PRM	55 Neutral	$1.52B	―	-0.51%	―	74.16%	-112.26%
Sector *	49 Neutral	$1.93B	-1.47	-21.02%	3.74%	0.80%	-29.57%
NGVT	48 Neutral	$1.21B	―	-104.11%	―	-16.92%	-6107.70%

Perimeter Solutions Corporate Events

Perimeter Solutions Achieves Strong Q3 Sales Growth

Perimeter Solutions reported a remarkable 102% increase in net sales for the third quarter of 2024, reaching $288.4 million, driven by strong performance in both its Fire Safety and Specialty Products segments. Despite a net loss of $89.2 million, the company achieved a 177% surge in adjusted EBITDA to $170.4 million, showcasing the effectiveness of its operational strategies and market recovery. With considerable cash reserves and reduced net leverage, Perimeter remains well-positioned for future capital allocation, supporting its mission-critical offerings in firefighting and specialty chemicals.