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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:78Outperform
Price Target:
$128.00
▲(15.59% Upside)
Pricesmart's overall stock score is driven by its strong financial performance and positive earnings call, highlighting robust sales growth and strategic expansion plans. Technical analysis supports a positive trend, though valuation metrics suggest moderate pricing. Challenges such as currency conversion issues and increased expenses slightly temper the outlook.

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

Pricesmart Business Overview & Revenue Model

Company DescriptionPriceSmart, Inc. operates as a membership-based warehouse club, primarily serving customers in Central America and the Caribbean. The company offers a wide range of products including groceries, electronics, home goods, and clothing, focusing on providing quality merchandise at competitive prices. With its business model centered around bulk purchasing and membership fees, PriceSmart caters to both individual consumers and businesses, aiming to deliver value through cost savings and a diverse product selection.
How the Company Makes MoneyPriceSmart generates revenue primarily through membership fees and the sale of merchandise. Customers pay an annual fee to become members, which grants them access to the club's discounted pricing on a wide array of products. The bulk purchasing model allows PriceSmart to negotiate favorable terms with suppliers, leading to lower costs that can be passed on to members. Additionally, the company benefits from high volume sales, which enhance its purchasing power and margin efficiency. Significant partnerships with various manufacturers and suppliers contribute to its ability to maintain a diverse inventory and competitive pricing. Furthermore, PriceSmart's expansion into new markets and its focus on enhancing the shopping experience through improved store layouts and online services also play a crucial role in driving sales and sustaining revenue growth.

Pricesmart Earnings Call Summary

Earnings Call Date:Jul 10, 2025
(Q3-2025)
|
% Change Since: 8.44%|
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call revealed strong performance in sales growth, expansion plans, and digital sales, indicating a positive business trajectory. However, challenges with currency conversion in Trinidad and increased operational expenses presented notable hurdles.
Q3-2025 Updates
Positive Updates
Strong Net Merchandise Sales Growth
Net merchandise sales reached almost $1.3 billion in Q3, with an 8% increase, or 9.5% in constant currency. For the first 9 months, net merchandise sales increased by 7.2% or 8.2% in constant currency.
Expansion Plans
Opened a new warehouse in Cartago, Costa Rica, and plans to open additional clubs in Guatemala and the Dominican Republic, expanding to 57 warehouse clubs.
Digital Channel Growth
Digital channel sales reached $79 million, a 19.8% increase year-over-year, representing 6.1% of total net merchandise sales.
Membership Growth
Membership accounts grew 5.1% to almost 2 million, with a 12-month renewal rate of 88%. Platinum membership increased to 16.1% of the total membership base.
Improved Margins
Total gross margin increased 20 basis points to 15.8%, and total revenue margins increased 30 basis points to 17.4% of total revenue.
Negative Updates
Currency Conversion Challenges in Trinidad
Faced difficulties with currency convertibility in Trinidad, affecting liquidity and necessitating complex financial arrangements.
Increased SG&A Expenses
SG&A expenses increased to 13.2% of total revenues, up 20 basis points due to planned technology investments.
Unrealized Losses and Increased Costs
Recorded a $7.2 million net loss in total other expense, primarily due to unrealized losses in U.S. dollar monetary assets and higher costs to convert local currency.
Company Guidance
During PriceSmart, Inc.'s third-quarter earnings call for fiscal year 2025, key financial metrics and strategic initiatives were discussed. The company reported net merchandise sales of nearly $1.3 billion for the quarter, with an 8% increase from the prior year, and total revenue exceeding $1.3 billion. Membership accounts grew by 5.1%, achieving a 12-month renewal rate of 88%. The Platinum membership segment expanded to 16.1% of the total membership base, up from 11% the previous year. Digital channel sales reached $79 million, marking a 19.8% year-over-year increase and representing 6.1% of total net merchandise sales. Operating income for the quarter rose to $56.2 million, a 12.7% increase from the previous year, while net income was $35.2 million or $1.14 per diluted share. PriceSmart is also focused on expansion, planning new warehouse clubs in Guatemala and the Dominican Republic, and exploring Chile as a potential new market. The company continues to invest in its logistics and distribution infrastructure and aims to enhance its omnichannel capabilities.

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 Price110.74
Price Trends
50DMA
106.91
Positive
100DMA
103.17
Positive
200DMA
96.11
Positive
Market Momentum
MACD
0.84
Positive
RSI
54.42
Neutral
STOCH
27.06
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 110.74 is above the 20-day moving average (MA) of 109.48, above the 50-day MA of 106.91, and above the 200-day MA of 96.11, indicating a bullish trend. The MACD of 0.84 indicates Positive momentum. The RSI at 54.42 is Neutral, neither overbought nor oversold. The STOCH value of 27.06 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 29 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 (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$3.41B23.3412.34%1.14%7.47%15.20%
78
Outperform
$8.11B40.6512.32%8.70%2.54%
74
Outperform
$24.74B21.4415.69%2.10%4.77%-23.73%
70
Outperform
$45.99B18.9124.06%1.88%-2.11%25.03%
70
Outperform
$12.82B22.2830.84%2.48%9.41%
63
Neutral
$20.85B14.73-3.85%3.09%2.70%-8.60%
60
Neutral
$23.65B19.25%-20.46%-202.26%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PSMT
Pricesmart
110.74
21.76
24.45%
DG
Dollar General
112.40
-8.71
-7.19%
DLTR
Dollar Tree
113.32
16.77
17.37%
KR
Kroger Company
69.56
17.85
34.52%
OLLI
Ollie's Bargain Outlet Holding
132.19
34.49
35.30%
BJ
Bj's Wholesale Club Holdings
97.11
13.06
15.54%

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: Aug 19, 2025