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Perimeter Solutions (PRM)
NYSE:PRM

Perimeter Solutions (PRM) AI Stock Analysis

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Perimeter Solutions

(NYSE:PRM)

Rating:75Outperform
Price Target:
$17.00
▲(10.46%Upside)
Perimeter Solutions' overall stock score is driven primarily by strong technical momentum and positive earnings call insights. The financial stability is solid but operational challenges in certain segments are a concern. Valuation metrics suggest a moderate caution regarding potential overvaluation.
Positive Factors
Earnings Performance
PRM's consolidated revenues and EBITDA have shown strong growth over a three-year period, highlighting effective execution of its operating model.
Inorganic Growth Prospects
Wasted no time executing on a 2nd bolt-on acquisition in its recently formed Printed Circuit Board product line, boosting confidence in the inorganic growth prospects for this business.
Market Position and Growth
Plans to cease operations by a looming competitor for PRM's Retardant business led to a significant share price increase.
Negative Factors
Competition Risk
Concerns about competition risk from a new US Retardant competitor weighed on PRM shares for an extended period.
Specialty Products Segment
Downtime at manufacturer provider led to Specialty Products segment sales loss, weighing on fiscal year outlook somewhat.

Perimeter Solutions (PRM) vs. SPDR S&P 500 ETF (SPY)

Perimeter Solutions Business Overview & Revenue Model

Company DescriptionPerimeter 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 MoneyPerimeter Solutions generates revenue through the sale of its specialized firefighting products and services. The company’s key revenue streams include the manufacturing and distribution of fire retardants and firefighting foams, which are critical in wildfire management and industrial fire safety. Additionally, Perimeter Solutions may engage in strategic partnerships and contracts with government agencies, fire departments, and industrial clients, which ensures a steady demand for its products. The company’s focus on innovation and compliance with stringent safety regulations further bolsters its market position and revenue potential.

Perimeter Solutions Earnings Call Summary

Earnings Call Date:May 08, 2025
(Q1-2025)
|
% Change Since: 50.15%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong start to 2025, with significant revenue growth in the Fire Safety segment and strategic acquisitions enhancing long-term value. However, challenges in the Specialty Products segment and potential impacts from trade policies present concerns.
Q1-2025 Updates
Positive Updates
Strong Start to 2025
First quarter adjusted EBITDA reached $18.1 million, reflecting solid execution of operational value drivers and fire activity in both North America and international markets.
Fire Safety Revenue Growth
Revenue for the Fire Safety segment was $37.2 million, up 48% from last year, driven by above-average fire activity in multiple states.
IMS Acquisition
Perimeter Solutions completed its first product line acquisitions at IMS for a total purchase price of $10 million, with plans for significant capital deployment into add-on acquisitions.
Capital Allocation
Nearly $23 million of capital was allocated in the quarter, exceeding targeted equity returns of 15% or higher. Investments included capital expenditures, M&A, and share repurchases.
Favorable Debt Structure
The company maintains a single series of fixed-rate notes at 5%, maturing in Q4 2029, with no financial maintenance covenants and substantial liquidity.
Negative Updates
Operational Challenges in Specialty Products
Operational challenges at the U.S. P2S5 manufacturing facility led to extensive downtime, reducing Specialty Products Q1 adjusted EBITDA to $8 million compared to $12.4 million in the prior year.
Suppressants Product Line Decline
The suppressants product line faced a more difficult comparison in Q1 due to a strong prior year period launch, leading to lower sales in suppressants in Q1 2025.
Trade Policy Impact
Potential 2% to 3% EBITDA exposure risk from tariffs, with limited ability to offset costs.
Company Guidance
During the Q1 2025 earnings call, Perimeter Solutions provided guidance with several key metrics. The company reported a strong start with adjusted EBITDA reaching $18.1 million, a 49% increase from the previous year, driven primarily by elevated fire activity in North America and international markets. Revenue for the Fire Safety segment was $37.2 million, marking a 48% year-over-year increase, while Specialty Products saw a net sales increase of $1 million due to the IMS acquisition. The company invested $23 million in capital deployment, including $10 million for IMS product line acquisitions and $8 million in share repurchases. Additionally, Perimeter generated $18.9 million in free cash flow, while maintaining a favorable debt structure with a net debt to LTM adjusted EBITDA ratio of 1.7x. Despite operational challenges, the guidance indicated confidence in their strategic pillars and capital allocation plans.

Perimeter Solutions Financial Statement Overview

Summary
Perimeter Solutions shows a stable financial position with strengths in cash generation and equity utilization. The income statement reflects moderate performance with strong margins, despite an EBIT margin that indicates operational challenges. Balance sheet metrics are solid with moderate leverage and a healthy return on equity. The cash flow statement highlights robust cash conversion and positive cash generation.
Income Statement
65
Positive
The income statement shows moderate performance with some positive trends. The TTM gross profit margin is robust at 56.53% and the net profit margin is quite strong at 23.23%. However, the EBIT margin is negative (-1.17%), indicating operational challenges. The revenue growth from the previous year is modest at 2.31%, suggesting slow but stable growth.
Balance Sheet
70
Positive
The balance sheet reflects a solid equity base with a debt-to-equity ratio of 0.57, indicating moderate leverage. The return on equity (ROE) is healthy at 10.96%, showing effective utilization of equity. The equity ratio is strong at 50.56%, suggesting a stable financial foundation.
Cash Flow
75
Positive
The cash flow statement is robust with a healthy operating cash flow to net income ratio of 1.54, indicating good cash conversion. Free cash flow has grown by 10.23% in the TTM period, demonstrating positive cash generation. The free cash flow to net income ratio is favorable at 1.43, highlighting efficient cash management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue573.95M560.97M322.11M360.50M362.34M339.58M
Gross Profit324.54M317.09M138.85M142.65M113.06M162.04M
EBITDA215.10M-3.77M173.07M211.01M-546.68M134.87M
Net Income133.34M-5.91M67.49M91.76M-661.52M24.25M
Balance Sheet
Total Assets2.59B2.42B2.32B2.46B2.59B1.14B
Cash, Cash Equivalents and Short-Term Investments225.55M198.46M52.80M126.75M225.55M22.48M
Total Debt664.13M21.55M689.70M684.30M664.13M687.27M
Total Liabilities1.50B1.26B1.16B1.32B1.50B846.78M
Stockholders Equity1.09B1.16B1.15B1.14B1.09B291.42M
Cash Flow
Free Cash Flow190.56M172.86M-9.24M-48.78M62.60M63.33M
Operating Cash Flow204.70M188.39M193.00K-40.17M72.35M70.83M
Investing Cash Flow-56.65M-42.94M-14.89M-10.25M-1.23B-9.47M
Financing Cash Flow14.41M8.35M-64.45M-48.81M-761.43M-45.61M

Perimeter Solutions Technical Analysis

Technical Analysis Sentiment
Positive
Last Price15.39
Price Trends
50DMA
12.26
Positive
100DMA
11.15
Positive
200DMA
12.05
Positive
Market Momentum
MACD
0.72
Negative
RSI
83.34
Negative
STOCH
91.87
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRM, the sentiment is Positive. The current price of 15.39 is above the 20-day moving average (MA) of 13.64, above the 50-day MA of 12.26, and above the 200-day MA of 12.05, indicating a bullish trend. The MACD of 0.72 indicates Negative momentum. The RSI at 83.34 is Negative, neither overbought nor oversold. The STOCH value of 91.87 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRM.

Perimeter Solutions Risk Analysis

Perimeter Solutions disclosed 47 risk factors in its most recent earnings report. Perimeter Solutions reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Perimeter Solutions Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
PRPRM
75
Outperform
$2.27B19.6411.76%70.16%
KWKWR
74
Outperform
$2.20B23.576.78%1.56%-5.72%-19.82%
SCSCL
67
Neutral
$1.34B24.164.65%2.60%-0.16%47.70%
MTMTX
62
Neutral
$1.88B11.37-1.45%0.74%-3.82%-126.04%
CCCC
56
Neutral
$1.94B62.834.66%2.71%-0.68%
55
Neutral
$1.71B-88.14%-17.68%-214.32%
44
Neutral
C$982.42M-6.71-13.24%2.54%17.20%-32.72%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PRM
Perimeter Solutions
15.39
7.39
92.38%
MTX
Minerals Technologies
59.10
-22.30
-27.40%
KWR
Quaker Chemical
124.26
-42.31
-25.40%
SCL
Stepan Company
59.25
-22.15
-27.21%
CC
Chemours Company
12.93
-8.27
-39.01%
NGVT
Ingevity
46.76
4.82
11.49%

Perimeter Solutions Corporate Events

Shareholder Meetings
Perimeter Solutions Holds 2025 Annual Stockholders Meeting
Neutral
May 29, 2025

On May 29, 2025, Perimeter Solutions, Inc. conducted its 2025 Annual Meeting of Stockholders virtually, where stockholders voted on three key proposals. The election of seven director nominees was approved, the compensation of the Company’s named executive officers received advisory approval, and the appointment of KPMG LLP as the independent registered public accounting firm for 2025 was ratified.

The most recent analyst rating on (PRM) stock is a Buy with a $14.00 price target. To see the full list of analyst forecasts on Perimeter Solutions stock, see the PRM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 03, 2025