Primo Brands (PRMB) AI Stock Analysis

• Market Cap: $13.49B
• Dividend Yield: 1.01%
• Average Volume (3M): 4.51M
• Price to Earnings (P/E): 20.1
• Beta (1Y): 0.27
• Revenue Growth: 29.32%
• EPS Growth: -100.27%
• Country: US
• Employees: 13,700
• Sector: Consumer Defensive
• Sector Strength: 75
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): >-0.01
• Shares Outstanding: 380,155,270
• 10 Day Avg. Volume: 4,224,588
• 30 Day Avg. Volume: 4,506,356
• PEG Ratio: 0.18
• Price to Book (P/B): N/A
• Price to Sales (P/S): 3.55
• Price to Cash Flow (P/CF): 14.20
• P/FCF Ratio: 20.20
• 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: $40.67
• Price Target Upside: 15.51% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 7

Primo Brands shows strong revenue growth and positive future guidance, which are major strengths. However, challenges such as negative profitability and increased financial leverage weigh on the stock's valuation and financial stability. The technical indicators and earnings call suggest moderate optimism, but caution is warranted due to financial concerns.

Positive Factors

Financial Performance

Fourth-quarter and full-year results for the new Primo Brands were strong.

Growth Potential

PRMB is poised for durable above-average top-line growth as it leverages its national platform of leading water brands to capitalize on category tailwinds.

Market Opportunity

Primo Brands discussed the attractive market opportunity and leading brand portfolio.

Negative Factors

Cost Synergies

Merger-related cost synergies are a key lever for margin expansion.

Industry Comparison

Revenue growth of MSD%+ would place PRMB solidly ahead of 1.5%-2.0% food industry growth and ~2% beverage industry growth.

Valuation

PRMB's valuation should migrate higher to more closely align with branded beverage companies.

Primo Brands Business Overview & Revenue Model

Company Description

Primo Water Corporation provides water direct to consumers and water filtration services in North America and Europe. It offers bottled water, purified bottled water, premium spring, sparkling and flavored water, mineral water, filtration equipment, and coffee; as well as water dispensers, and self-service refill drinking water. The company offers its products under the Primo, Alhambra, Crystal Rock, Mountain Valley, Deep Rock, Hinckley Springs, Crystal Springs, Kentwood Springs, Mount Olympus, Pureflo, Nursery, Sierra Springs, Sparkletts, Clear Mountain Natural Spring Water, Earth2O, Renü, Water Event Pure Water Solutions, Canadian Springs, Labrador Source, Decantae, Eden, Eden Springs, Chateaud'eau, and Mey Eden brands. It provides its services to residential customers, small and medium-sized businesses, and regional and national corporations and retailers. The company was formerly known as Cott Corporation and changed its name to Primo Water Corporation in March 2020. Primo Water Corporation was incorporated in 1955 and is headquartered in Tampa, Florida.

How the Company Makes Money

Primo Brands generates revenue through a diversified business model that includes direct-to-consumer sales, retail partnerships, and online platforms. The primary revenue streams come from the sale of its premium product lines through its e-commerce website and physical retail locations. Additionally, the company has established significant partnerships with major retailers to expand its market reach and enhance brand visibility. Strategic collaborations and seasonal product launches further contribute to Primo Brands' earnings by driving customer engagement and increasing sales volume. The company also invests in marketing initiatives and brand development to strengthen its presence in the competitive consumer goods market.

Primo Brands Financial Statement Overview

Summary

Overall, Primo Brands demonstrates robust revenue growth and efficient cash flow management, which are promising for future operations. However, the company faces challenges with profitability and increased financial leverage, which could impact long-term stability if not managed carefully. The negative net income and increased debt highlight the need for strategic focus on cost control and debt management to enhance financial health.

Income Statement

Primo Brands has shown strong revenue growth over the years, particularly from 2023 to 2024 with a 9.65% increase. However, the net profit margin turned negative in 2024, indicating profitability challenges despite the positive growth trend. The gross profit margin remains strong at 31.48% for 2024, but the decline in EBIT margin from 8.64% in 2023 to 7.00% in 2024 suggests increased operating expenses or cost pressures.

Balance Sheet

The company's debt-to-equity ratio has increased to 1.65 in 2024, indicating higher financial leverage and potential risk if market conditions change. Despite this, the equity ratio remains stable at 30.77%, reflecting a reasonable level of asset financing through equity. Return on Equity (ROE) has turned negative due to the net loss in 2024, which is a point of concern for shareholder returns.

Cash Flow

Primo Brands' cash flow metrics show resilience with a substantial increase in free cash flow by 164.52% from 2023 to 2024, indicating effective cash management. The operating cash flow to net income ratio is strong, suggesting high-quality earnings. However, the free cash flow to net income ratio in 2024 is negative due to the net loss, reflecting a need for caution in cash flow sustainability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.15B	4.70B	4.44B	1.58B	1.95B
	Gross Profit
1.62B	1.35B	994.20M	891.00M	1.11B
	EBIT
360.30M	406.00M	23.30M	103.00M	-52.20M
	EBITDA
693.60M	711.70M	358.20M	241.10M	131.20M
	Net Income Common Stockholders
-16.40M	92.80M	-126.70M	-3.20M	-131.70M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
613.70M	44.70M	102.90M	128.40M	115.10M
	Total Assets
11.19B	5.15B	5.38B	3.72B	3.60B
	Total Debt
5.68B	4.05B	3.92B	1.74B	1.65B
	Net Debt
5.07B	4.01B	3.81B	1.61B	1.54B
	Total Liabilities
7.75B	5.15B	5.25B	2.40B	2.26B
	Stockholders Equity
3.44B	2.70M	134.60M	1.32B	1.35B
Cash Flow		Free Cash Flow
272.90M	103.20M	-228.40M	135.70M	52.90M
	Operating Cash Flow
463.80M	320.90M	108.30M	256.90M	176.20M
	Investing Cash Flow
468.60M	-217.60M	-319.40M	-240.90M	-178.00M
	Financing Cash Flow
-362.90M	-162.30M	-147.70M	-800.00K	-91.10M

Primo Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 35.21
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRMB, the sentiment is Positive. The current price of 35.21 is above the 20-day moving average (MA) of 32.61, above the 50-day MA of 32.91, and above the 200-day MA of 26.83, indicating a bullish trend. The MACD of 0.66 indicates Negative momentum. The RSI at 66.62 is Neutral, neither overbought nor oversold. The STOCH value of 91.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PRMB.

Primo Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEP	77 Outperform	$205.64B	21.57	52.42%	3.55%	0.42%	5.77%
MNST	76 Outperform	$56.95B	39.44	21.27%	―	4.94%	-4.13%
CELH	76 Outperform	$8.38B	80.76	12.54%	―	2.85%	-43.53%
KO	73 Outperform	$308.22B	29.10	41.86%	2.71%	1.96%	-0.45%
FIZZ	69 Neutral	$3.89B	20.95	40.81%	―	0.34%	9.48%
PRMB	69 Neutral	$13.49B	20.07	-3.43%	1.01%	29.32%	-100.27%
Sector *	63 Neutral	$20.94B	14.39	-10.05%	3.13%	1.25%	3.11%

Primo Brands Corporate Events

Primo Brands Board Member Joseph Rosenberg Resigns

On March 18, 2025, Joseph Rosenberg resigned from Primo Brands Corporation’s Board of Directors following a decrease in ownership of the company’s Class A common stock by ORCP Stockholders. His resignation, effective March 20, 2025, was not due to any disagreements with the company. Following his departure, the Board reduced its size to thirteen directors as requested by the Initial ORCP Stockholder.

Primo Brands Announces Secondary Stock Offering Pricing

On March 10, 2025, Primo Brands Corporation announced the pricing of a secondary offering of 51,750,000 shares of its Class A common stock, including an option for underwriters to purchase additional shares, at $29.50 per share. The offering, which closed on March 12, 2025, was conducted by a stockholder affiliated with One Rock Capital Partners, with Morgan Stanley and BofA Securities leading the underwriting. The company agreed to repurchase 4,000,000 shares from the underwriters, funded by cash on hand, while the selling stockholder received all net proceeds. This move is part of the company’s strategic financial operations, potentially impacting its market positioning and shareholder value.

Primo Brands Announces Secondary Stock Offering

On March 10, 2025, Primo Brands Corporation announced a secondary offering of 45,000,000 shares of its Class A common stock by a stockholder affiliated with One Rock Capital Partners. The company plans to repurchase 4,000,000 shares from the underwriters using cash on hand, with the offering subject to market conditions. This move could potentially impact the company’s stock price and market positioning.

Primo Brands Completes Strategic Debt Restructuring

On February 28, 2025, Primo Brands Corporation announced the completion of the final settlement of exchange offers for its subsidiaries’ senior notes. This settlement involved exchanging existing notes for new secured and unsecured notes, along with cash considerations. The move is part of a strategic financial restructuring to manage debt obligations, impacting the company’s financial stability and positioning in the market. The cancellation of a significant portion of existing notes and issuance of new ones reflects a substantial shift in the company’s debt structure, potentially affecting stakeholders and future financial strategies.

Primo Brands Concludes Senior Notes Exchange Offers

On February 25, 2025, Primo Brands Corporation announced the expiration of its private offers to exchange three series of outstanding senior notes for new notes and cash, which began on January 27, 2025. The final settlement for late tender notes is expected on February 28, 2025. This move is part of Primo Brands’ strategic financial management, aiming to optimize its debt structure and maintain competitive positioning in the market. The exchange offers were conducted under an exemption from registration requirements, reflecting the company’s proactive approach to managing its financial obligations and stakeholder interests.