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Perimeter Solutions, Sa (PRM)
:PRM
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Perimeter Solutions
(NYSE:PRM)
Rating:72Outperform
Price Target:
$13.50
▲( 15.09% Upside)
Positive Factors
Growth Opportunities
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.
M&A Potential
PRM has a sizable cash pile potentially indicating higher near-term M&A likelihood.
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 Risks
Concerns about competition risk from a new US Retardant competitor weighed on PRM shares for an extended period.
Operational Challenges
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)
Market Cap
$1.73B
Dividend YieldN/A
Average Volume (3M)934.79K
Price to Earnings (P/E)15.0
Beta (1Y)1.16
Revenue Growth70.16%
EPS GrowthN/A
CountryUS
Employees319
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.03
Shares Outstanding147,728,760
10 Day Avg. Volume992,997
30 Day Avg. Volume934,792
Financial Highlights & Ratios
PEG Ratio-3.03
Price to Book (P/B)1.48
Price to Sales (P/S)0.00
P/FCF Ratio10.00
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue0.85
Enterprise Value/Gross Profit4.89
Enterprise Value/Ebitda5.93
Forecast
1Y Price Target
$15.50Price Target Upside32.14% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Perimeter Solutions Business Overview & Revenue Model
Company DescriptionPerimeter Solutions (PRM) is a leading global provider of innovative solutions that enhance the safety and security of people and property. The company operates primarily in the fire safety and oil additives sectors, offering a range of products including fire retardants, firefighting foam, and specialized chemicals that improve the efficiency and performance of fuels. Perimeter Solutions is dedicated to delivering high-quality, reliable products that meet the stringent requirements of its clients, which include government agencies, industrial companies, and commercial enterprises.
How the Company Makes MoneyPerimeter 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.45
Neutral
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.55
Neutral
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.50
Neutral
| 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 | |||
| 172.86M | -9.24M | -48.78M | 62.60M | 63.33M | Operating Cash Flow |
| 188.39M | 193.00K | -40.17M | 72.35M | 70.83M | Investing Cash Flow |
| -42.94M | -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
Positive
11.73
Price Trends
10.34
Positive
11.01
Positive
11.74
Negative
Market Momentum
0.45
Negative
61.42
Neutral
28.40
Neutral
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 11.73 is above the 20-day moving average (MA) of 11.23, above the 50-day MA of 10.34, and below the 200-day MA of 11.74, indicating a neutral trend. The MACD of 0.45 indicates Negative momentum. The RSI at 61.42 is Neutral, neither overbought nor oversold. The STOCH value of 28.40 is Neutral, 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 3 New Risks
1.
Our share price could be adversely affected if we are unable to maintain effective internal controls. Q4, 2024
2.
Anti-takeover provisions in the Company's Organizational Documents could make an acquisition of us more difficult and limit attempts by our shareholders to replace or remove our current management. Q4, 2024
3.
The Company's Organizational Documents designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors or officers or other matters pertaining to our internal affairs. Q4, 2024
Perimeter Solutions Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $1.73B | 14.97 | 11.76% | ― | 70.16% | ― | |
68 Neutral | $1.88B | 20.20 | 6.78% | 1.79% | -5.72% | -19.82% | |
68 Neutral | $1.23B | 22.20 | 4.65% | 2.79% | -0.16% | 47.70% | |
65 Neutral | $1.84B | 11.37 | -1.45% | 0.72% | -3.82% | -126.04% | |
54 Neutral | $1.49B | ― | -88.14% | ― | -17.68% | -214.32% | |
50 Neutral | $1.99B | -1.06 | -21.34% | 3.71% | 2.03% | -30.65% | |
49 Neutral | $1.54B | 50.05 | 4.66% | 9.71% | -0.68% | ― |
* Basic Materials Sector Average
Performance Comparison
PRM
Perimeter Solutions
11.73
4.22
56.19%
MTX
Minerals Technologies
58.14
-25.77
-30.71%
KWR
Quaker Chemical
106.48
-72.59
-40.54%
SCL
Stepan Company
54.43
-29.47
-35.13%
CC
Chemours Company
10.30
-15.02
-59.32%
NGVT
Ingevity
40.89
-6.97
-14.56%
Perimeter Solutions Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: 14.44%|
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 Corporate Events
Business Operations and StrategyFinancial Disclosures
Perimeter Solutions Achieves Strong Q3 Sales Growth
Positive
Nov 12, 2024
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.
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.