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Persimmon (PSMMY)
OTHER OTC:PSMMY

Persimmon (PSMMY) AI Stock Analysis

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Persimmon

(OTC:PSMMY)

Rating:71Outperform
Price Target:
Persimmon's stock benefits from strong revenue growth and a solid equity position, which reduce leverage risks. The positive technical indicators suggest a favorable market sentiment, although high stochastic levels require caution. Valuation metrics indicate that the stock is fairly priced with attractive dividends. However, declining profit margins and cash flow sustainability issues pose challenges to long-term financial health. Investors should monitor margin improvements and cash management.

Persimmon (PSMMY) vs. SPDR S&P 500 ETF (SPY)

Persimmon Business Overview & Revenue Model

Company DescriptionPersimmon Plc, together with its subsidiaries, operates as a house builder in the United Kingdom. The company offers family housing under the Persimmon Homes brand name; executive housing under the Charles Church brand name; and social housing under the Westbury Partnerships brand name. It also provides broadband services. Persimmon Plc was founded in 1972 and is headquartered in York, the United Kingdom.
How the Company Makes MoneyPersimmon makes money primarily through the sale of newly constructed residential properties. The company's revenue model is centered around acquiring land, obtaining planning permissions, and developing residential sites into attractive housing estates. Persimmon benefits from a strategic land bank that allows it to build homes in desirable locations. Key revenue streams include the sale of homes under its multiple brands, such as Persimmon Homes, Charles Church, and Westbury Partnerships. The company may also generate income from partnerships with local governments and housing associations, particularly in affordable housing projects. Additionally, Persimmon's financial performance is influenced by factors such as the UK housing market conditions, government housing policies, and economic factors affecting consumer demand and affordability.

Persimmon Financial Statement Overview

Summary
Persimmon demonstrates revenue growth and a strong equity position, reducing leverage risks. However, declining margins and cash reserves, along with a low operating cash flow to net income ratio, suggest profitability and cash flow sustainability challenges. Continued focus on margin improvement and cash flow management is recommended to strengthen financial health.
Income Statement
65
Positive
Persimmon's revenue for 2024 showed a 15.41% increase from the previous year, indicating positive growth. However, gross profit and net income margins have decreased over the years, with a notable drop in gross profit margin from 29.37% in 2023 to 18.13% in 2024. The absence of EBIT in 2024 affects profitability analysis. Despite revenue growth, declining margins suggest potential profitability challenges.
Balance Sheet
75
Positive
The company's balance sheet reflects strong equity, with an equity ratio consistently above 70%. The debt-to-equity ratio improved to 0 in 2024, reducing leverage risks. Previously, the debt-to-equity ratio was manageable, indicating prudent financial management. However, the decline in cash reserves from 2023 to 2024 may require monitoring.
Cash Flow
60
Neutral
Operating cash flow turned positive in 2024 after a negative year in 2023, indicating improved cash generation. Free cash flow also improved significantly. However, the operating cash flow to net income ratio remains low, suggesting that cash earnings are not fully translating into net income. Cash flow improvements are a positive sign, but sustainability needs assessment.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.20B2.77B3.82B3.61B3.33B
Gross Profit580.40M795.10M867.50M1.08B894.40M
EBITDA400.40M381.00M738.20M973.50M799.30M
Net Income267.10M255.40M561.00M787.20M638.40M
Balance Sheet
Total Assets4.83B4.79B5.03B4.79B4.62B
Cash, Cash Equivalents and Short-Term Investments258.60M420.10M861.60M1.25B1.23B
Total Debt0.00392.70M498.00M436.90M362.60M
Total Liabilities1.33B1.37B1.59B1.17B1.10B
Stockholders Equity3.51B3.42B3.44B3.63B3.52B
Cash Flow
Free Cash Flow52.60M-166.20M371.80M763.90M746.60M
Operating Cash Flow84.90M-129.80M402.30M784.80M765.50M
Investing Cash Flow-45.00M-42.90M-29.80M-18.20M-18.10M
Financing Cash Flow-201.40M-268.80M-757.50M-754.10M-357.20M

Persimmon Technical Analysis

Technical Analysis Sentiment
Negative
Last Price32.65
Price Trends
50DMA
34.95
Negative
100DMA
32.37
Positive
200DMA
33.27
Positive
Market Momentum
MACD
-0.04
Positive
RSI
39.99
Neutral
STOCH
10.41
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSMMY, the sentiment is Negative. The current price of 32.65 is below the 20-day moving average (MA) of 35.53, below the 50-day MA of 34.95, and below the 200-day MA of 33.27, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 39.99 is Neutral, neither overbought nor oversold. The STOCH value of 10.41 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSMMY.

Persimmon Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$3.62B21.5416.30%4.09%3.14%
73
Outperform
$6.28B7.2815.97%12.19%23.15%
71
Outperform
$5.22B15.297.81%6.39%18.72%7.44%
SKSKY
70
Outperform
$3.73B19.0713.38%22.65%34.77%
MTMTH
66
Neutral
$4.93B6.9514.58%2.44%-0.68%-7.99%
KBKBH
64
Neutral
$3.79B6.9914.09%1.85%3.65%-0.48%
63
Neutral
$16.67B10.98-6.97%2.95%1.72%-24.21%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PSMMY
Persimmon
32.65
-2.31
-6.61%
CVCO
Cavco Industries
447.15
103.35
30.06%
KBH
KB Home
52.78
-11.61
-18.03%
MTH
Meritage
68.65
-7.04
-9.30%
SKY
Champion Homes
65.14
-2.71
-3.99%
TMHC
Taylor Morrison
62.59
8.69
16.12%
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: Apr 20, 2025