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Pricesmart (PSMT)
NASDAQ:PSMT
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Pricesmart (PSMT) AI Stock Analysis

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PSMT

Pricesmart

(NASDAQ:PSMT)

Rating:79Outperform
Price Target:
$123.00
▲(14.42%Upside)
Pricesmart's strong financial performance and positive earnings call sentiment are the most significant factors driving its score. The stable technical indicators and strategic leadership transition further support the company's positive outlook, although the valuation is moderate.

Pricesmart (PSMT) vs. SPDR S&P 500 ETF (SPY)

Pricesmart Business Overview & Revenue Model

Company DescriptionPriceSmart, Inc. owns and operates U.S. style membership shopping warehouse clubs in the United States, Central America, the Caribbean, and Colombia. Its warehouse clubs sell brand name and private label consumer products, essential goods, fresh produce, prepared foods, and fresh-baked goods, as well as provides services, such as optical, tire center, and other ancillary services. The company also operates Click & Go, an e-commerce platform for online ordering, curbside pickup, and delivery services. As of March 29, 2022, it operated 49 warehouse clubs in 12 countries and one U.S. territory. PriceSmart, Inc. was incorporated in 1994 and is headquartered in San Diego, California.
How the Company Makes MoneyPriceSmart makes money primarily through the sale of goods and services to its membership base. The company operates on a membership fee model, where consumers pay an annual fee to gain access to its warehouse stores. This membership fee provides a stable source of revenue independent of sales. Additionally, PriceSmart generates revenue through the direct sale of products within its warehouse clubs, leveraging bulk purchasing and efficient supply chain management to offer competitive prices. The company also benefits from partnerships with local suppliers and international brands to diversify its product offerings, further enhancing its revenue streams.

Pricesmart Earnings Call Summary

Earnings Call Date:Jul 10, 2025
(Q3-2025)
|
% Change Since: 4.67%|
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, expansion efforts, and digital channel growth, which were somewhat offset by challenges with currency conversion and increased other expenses. Despite technical difficulties during the call, the overall outlook remains positive with significant growth and expansion plans.
Q3-2025 Updates
Positive Updates
Strong Financial Performance
Net merchandise sales reached almost $1.3 billion, with total revenue over $1.3 billion. For the first 9 months of fiscal year, net merchandise sales exceeded $3.8 billion, and total revenue was over $3.9 billion.
Digital Channel Growth
Digital channel sales reached $79 million, a 19.8% increase year-over-year, representing 6.1% of total net merchandise sales, marking the highest digital contribution to date.
Expansion Efforts
Opened a new warehouse in Cartago, Costa Rica, with plans to open more in Guatemala and the Dominican Republic, along with evaluating Chile as a potential new market.
Membership Growth
Membership accounts grew by 5.1% to almost 2 million, with a 12-month renewal rate of 88%. Platinum membership increased significantly from 11% to 16.1% of the total membership base.
Improved Gross Margin
Total gross margin increased by 20 basis points to 15.8%, and total revenue margins increased by 30 basis points to 17.4% compared to the previous year.
Sustainability Initiatives
Released fiscal year 2024 sustainability report, emphasizing commitment to environmental and social responsibility.
Negative Updates
Currency Conversion Challenges
Faced challenges in converting local currency to U.S. dollars, impacting countries like Trinidad and Honduras.
Increase in Other Expenses
A $7.2 million net loss in total other expense due to unrealized losses in value of U.S. dollar monetary assets and liabilities, and increased cost of currency conversion premiums.
Technical Issues During Call
Technical difficulties during the call affected communication, leading to interruptions and disconnections.
Company Guidance
During PriceSmart's third-quarter fiscal year 2025 earnings call, the company provided several key metrics and updates. Net merchandise sales reached nearly $1.3 billion, contributing to a total revenue of over $1.3 billion for the quarter. For the first nine months of the fiscal year, net merchandise sales surpassed $3.8 billion, with total revenue exceeding $3.9 billion. Digital channel sales increased by 19.8% year-over-year, reaching $79 million, and represented 6.1% of total net merchandise sales. In terms of membership growth, accounts increased by 5.1% to almost 2 million, with a 12-month renewal rate of 88%. The company's gross margin improved by 20 basis points to 15.8% of net merchandise sales, while operating income for the quarter rose by 12.7% to $56.2 million. Net income for the quarter was $35.2 million, or $1.14 per diluted share. The call also highlighted plans to expand operations, including new warehouse clubs in Costa Rica, Guatemala, and the Dominican Republic, and potential market entry into Chile.

Pricesmart Financial Statement Overview

Summary
Pricesmart exhibits strong revenue growth and solid profitability margins. The balance sheet is stable with low leverage, and cash flow metrics show significant improvement, reflecting effective cash management.
Income Statement
85
Very Positive
Pricesmart demonstrates strong revenue growth with a 5.1% increase in TTM compared to the previous period. Gross Profit Margin stands at 37.43%, showing a well-maintained level of profitability. Net Profit Margin improved slightly to 2.82%. EBIT Margin is stable at 4.43%, and EBITDA Margin is robust at 5.46%. Overall, Pricesmart's income statement reflects consistent growth and solid profitability margins.
Balance Sheet
78
Positive
The company maintains a conservative Debt-to-Equity Ratio of 0.13, indicating low leverage. Return on Equity is modest at 11.98%, highlighting effective use of equity in generating profits. The Equity Ratio is strong at 56.61%, suggesting a solid equity base compared to total assets. Pricesmart's balance sheet demonstrates financial stability with low debt levels and ample equity.
Cash Flow
80
Positive
Free Cash Flow grew significantly by 137.54% in the TTM, reflecting improved cash generation. Operating Cash Flow to Net Income Ratio is strong at 1.52, indicating healthy cash flow relative to net income. Free Cash Flow to Net Income Ratio also improved to 0.64, showcasing effective cash management. Pricesmart's cash flow position highlights its capability to generate and manage cash effectively.
BreakdownSep 2024Sep 2023Sep 2022Sep 2021Sep 2020
Income Statement
Total Revenue4.91B4.41B4.07B3.62B3.33B
Gross Profit846.92M759.33M681.15M644.53M554.41M
EBITDA297.00M278.25M235.94M223.80M183.94M
Net Income138.88M109.20M104.53M97.96M78.11M
Balance Sheet
Total Assets2.02B2.01B1.81B1.71B1.66B
Cash, Cash Equivalents and Short-Term Investments225.53M331.06M248.87M252.29M345.99M
Total Debt249.63M278.18M273.87M267.29M329.96M
Total Liabilities899.73M898.57M817.33M789.58M824.09M
Stockholders Equity1.12B1.11B991.07M915.35M831.72M
Cash Flow
Free Cash Flow39.04M114.82M1.17M13.99M158.95M
Operating Cash Flow207.59M257.33M121.83M127.17M259.27M
Investing Cash Flow-175.45M-222.08M-74.76M-116.72M-131.21M
Financing Cash Flow-150.03M-41.05M-12.21M-95.14M75.56M

Pricesmart Technical Analysis

Technical Analysis Sentiment
Positive
Last Price107.50
Price Trends
50DMA
106.24
Positive
100DMA
99.67
Positive
200DMA
95.01
Positive
Market Momentum
MACD
0.53
Positive
RSI
52.84
Neutral
STOCH
44.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSMT, the sentiment is Positive. The current price of 107.5 is above the 20-day moving average (MA) of 106.79, above the 50-day MA of 106.24, and above the 200-day MA of 95.01, indicating a bullish trend. The MACD of 0.53 indicates Positive momentum. The RSI at 52.84 is Neutral, neither overbought nor oversold. The STOCH value of 44.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PSMT.

Pricesmart Risk Analysis

Pricesmart disclosed 28 risk factors in its most recent earnings report. Pricesmart reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Pricesmart Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$13.87B24.4632.76%2.84%11.25%
79
Outperform
$3.30B22.5912.34%0.59%7.47%15.20%
78
Outperform
$8.46B42.5912.32%8.70%2.54%
77
Outperform
$23.51B20.3815.69%2.24%4.77%-23.73%
68
Neutral
$45.82B18.8424.06%1.83%-2.11%25.03%
65
Neutral
$27.10B15.29-1.16%3.10%1.15%2.75%
60
Neutral
$23.70B19.25%-20.46%-202.26%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PSMT
Pricesmart
107.50
19.25
21.81%
DG
Dollar General
104.90
-12.14
-10.37%
DLTR
Dollar Tree
113.55
13.80
13.83%
KR
Kroger Company
70.10
16.17
29.98%
OLLI
Ollie's Bargain Outlet Holding
136.63
38.98
39.92%
BJ
Bj's Wholesale Club Holdings
105.90
18.10
20.62%

Pricesmart Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
PriceSmart Appoints New CFO Amid Leadership Transition
Positive
May 9, 2025

PriceSmart announced the appointment of Gualberto Hernandez as Executive Vice President and Chief Financial Officer, effective June 1, 2025, following the resignation of Michael McCleary, who will continue as an Executive Vice President until September 30, 2025, and then provide consulting support. Hernandez, with a strong background in finance and strategy from his tenure at Estée Lauder and Sephora, is expected to bring valuable expertise to PriceSmart. The transition is part of a broader strategy to maintain growth and operational efficiency, with McCleary expressing confidence in the company’s future under new leadership.

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 16, 2025