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Pricesmart (PSMT)
NASDAQ:PSMT
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Pricesmart
(NASDAQ:PSMT)
Rating:79Outperform
Price Target:―
Pricesmart (PSMT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.28B
Dividend Yield1.14%
Average Volume (3M)258.45K
Price to Earnings (P/E)22.7
Beta (1Y)0.44
Revenue Growth8.65%
EPS Growth17.76%
CountryUS
Employees12,000
SectorConsumer Defensive
Sector Strength69
IndustryDiscount Stores
Share Statistics
EPS (TTM)1.45
Shares Outstanding30,754,145
10 Day Avg. Volume196,327
30 Day Avg. Volume258,449
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)2.68
Price to Sales (P/S)0.00
P/FCF Ratio40.96
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue0.17
Enterprise Value/Gross Profit1.73
Enterprise Value/Ebitda2.81
Forecast
1Y Price Target
$100.00Price Target Upside-3.83% Downside
Rating ConsensusHold
Number of Analyst Covering1
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 Financial Statement Overview
Summary
Pricesmart's financial performance is strong, with consistent revenue growth and improved profitability margins. The company's balance sheet is robust, with effective leverage management and efficient cash flow generation. Despite minor fluctuations in free cash flow, the overall financial health remains solid.Income Statement
Pricesmart has demonstrated consistent revenue growth with a substantial increase from $3.62 billion in 2021 to $5.08 billion in TTM (Trailing-Twelve-Months). Gross profit margin has improved significantly, indicating better cost management. Net profit margin has been stable, reflecting consistent profitability. The EBIT and EBITDA margins show healthy operational efficiency, with a noticeable rise in EBIT margin over the years.85
Very Positive
Balance Sheet
The company's balance sheet reveals a solid equity base with a consistent increase in stockholders' equity, providing a stable financial foundation. The debt-to-equity ratio has decreased, indicating better leverage management. The equity ratio remains robust, highlighting the company’s good asset financing structure. Return on equity has been stable, reflecting efficient use of shareholder funds.80
Positive
Cash Flow
Operating cash flow has been strong, consistently covering net income, showing the company’s operations are generating sufficient cash. Free cash flow has fluctuated but remains positive, indicating prudent capital expenditure management. The operating cash flow to net income ratio is healthy, suggesting efficient cash generation relative to earnings.78
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 5.08B | 4.91B | 4.41B | 4.07B | 3.62B | 3.33B | Gross Profit |
| 1.91B | 846.92M | 759.33M | 681.15M | 644.53M | 554.41M | EBIT |
| 223.02M | 220.94M | 184.52M | 99.43M | 90.44M | 62.88M | EBITDA |
| 296.92M | 297.00M | 278.25M | 235.94M | 223.80M | 183.94M | Net Income Common Stockholders |
| 142.75M | 138.88M | 109.20M | 104.53M | 97.96M | 78.11M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 247.30M | 225.53M | 331.06M | 248.87M | 252.29M | 345.99M | Total Assets |
| 2.09B | 2.02B | 2.01B | 1.81B | 1.71B | 1.66B | Total Debt |
| 236.18M | 249.63M | 278.18M | 273.87M | 267.29M | 329.96M | Net Debt |
| 105.82M | 124.26M | 38.19M | 36.16M | 65.23M | 30.48M | Total Liabilities |
| 920.08M | 899.73M | 898.57M | 817.33M | 789.58M | 824.09M | Stockholders Equity |
| 1.17B | 1.12B | 1.11B | 991.07M | 915.35M | 831.72M |
| Cash Flow | Free Cash Flow | ||||
| 78.43M | 39.04M | 114.82M | 1.17M | 13.99M | 158.95M | Operating Cash Flow |
| 206.31M | 207.59M | 257.33M | 121.83M | 127.17M | 259.27M | Investing Cash Flow |
| -149.69M | -175.45M | -222.08M | -74.76M | -116.72M | -131.21M | Financing Cash Flow |
| -98.41M | -150.03M | -41.05M | -12.21M | -95.14M | 75.56M |
Pricesmart Technical Analysis
Positive
103.98
Price Trends
93.50
Positive
91.86
Positive
90.30
Positive
Market Momentum
3.32
Positive
70.09
Negative
79.02
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 103.98 is above the 20-day moving average (MA) of 102.63, above the 50-day MA of 93.50, and above the 200-day MA of 90.30, indicating a bullish trend. The MACD of 3.32 indicates Positive momentum. The RSI at 70.09 is Negative, neither overbought nor oversold. The STOCH value of 79.02 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 (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $3.28B | 22.71 | 12.42% | 1.14% | 8.65% | 17.76% | |
79 Outperform | $7.41B | 36.15 | 12.47% | ― | 8.04% | 10.75% | |
75 Outperform | $15.62B | 29.77 | 32.33% | ― | 2.67% | 2.72% | |
68 Neutral | $45.92B | 18.77 | 26.59% | 1.80% | -1.94% | 23.94% | |
66 Neutral | $21.59B | 19.20 | 15.89% | 2.31% | 4.96% | -32.41% | |
64 Neutral | $8.88B | 14.67 | 4.78% | 173.89% | 3.39% | 2.18% | |
61 Neutral | $19.04B | ― | 18.88% | ― | -9.88% | -205.57% |
* Consumer Defensive Sector Average
Performance Comparison
PSMT
Pricesmart
103.98
20.58
24.68%
DG
Dollar General
100.78
-38.05
-27.41%
DLTR
Dollar Tree
88.92
-24.85
-21.84%
KR
Kroger Company
68.90
16.11
30.52%
OLLI
Ollie's Bargain Outlet Holding
116.34
42.46
57.47%
BJ
Bj's Wholesale Club Holdings
117.50
37.01
45.98%
Pricesmart Earnings Call Summary
Earnings Call Date:Apr 09, 2025
(Q2-2025)
| % Change Since: 21.20%|
Next Earnings Date:Jul 09, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a strong performance in terms of revenue growth, membership expansion, and digital sales. However, concerns were raised over decreased gross margins, increased SG&A expenses, and potential impacts from global tariff challenges. The company's strategic investments in infrastructure and technology are expected to address some of these challenges.Q2-2025 Updates
Positive Updates
Solid Revenue Growth
Net merchandise sales reached over $1.3 billion in Q2 and total revenue was almost $1.4 billion. For the first half, net merchandise sales were nearly $2.6 billion with total revenue exceeding $2.6 billion. Merchandise sales increased by 5.8% or 7% in constant currency.
Strong Regional Performance
In Colombia, net merchandise sales increased by 6.6% or 16% in constant currency. The Caribbean region saw a 6.4% increase or 8.6% in constant currency.
Membership Growth
Membership accounts grew by 4.1% to over 1.9 million accounts with a 12-month renewal rate of 87%. Platinum membership increased significantly from 9.6% to 14.5% of total membership.
Digital Sales Expansion
Net merchandise sales through digital channels increased by 19.3%, reaching a record high of $76.2 million or 5.7% of total net merchandise sales.
Efficient Cash Flow and Investments
Net cash used in investing activities decreased by $25.8 million, and there was a decrease in property and equipment expenditures by $40.7 million.
Effective Tax Rate Reduction
The effective tax rate decreased to 27.2% from 30.5% a year ago due to tax optimization initiatives.
Negative Updates
Decreased Gross Margin
Total gross margins decreased by 10 basis points to 15.6% versus 15.7% in the prior year.
Increased SG&A Expenses
SG&A expenses increased to 12.4% of total revenues compared to 12.2% the previous year, primarily due to planned technology investments.
Tariff Challenges
Ongoing tariff challenges with potential cost pressures due to new US baseline tariffs and reciprocal tariffs from other countries.
Inventory and Cash Conversion Issues
Average inventory per club increased by approximately 9.4%, and inventory days on hand increased by approximately 3.1%.
Company Guidance
During the PriceSmart, Inc. earnings call for the second quarter of fiscal year 2025, several key metrics were highlighted. Net merchandise sales for the quarter reached over $1.3 billion with total revenue nearing $1.4 billion. The company experienced a net merchandise sales growth of 5.8% or 7% in constant currency, while comparable net merchandise sales increased by 6.7% or 7.9% in constant currency. Membership accounts grew by 4.1% to over 1.9 million, with a 12-month renewal rate of 87%. The second quarter also saw a gross margin decrease of 10 basis points to 15.6%, though in dollar terms, total gross margin rose by $10 million, or 5%. Operating income for the quarter increased by 2.6% to $65.3 million, and the effective tax rate dropped to 27.2% from 30.5% a year ago. Adjusted EBITDA reached $87 million, up from $84.1 million in the previous year. Finally, the company is focused on store expansion, with plans to open a new club in Guatemala, and is actively enhancing its supply chain and digital capabilities to support future growth.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.
Spark’s Take on PSMT Stock
According to Spark, TipRanks’ AI Analyst, PSMT is a Outperform.
Pricesmart’s strong financial foundation, positive technical indicators, and strategic initiatives highlighted in the earnings call contribute to a favorable outlook. The company’s valuation is reasonable, and recent corporate events such as leadership changes and dividend announcements further bolster investor confidence. However, challenges such as decreased gross margins and increased operational expenses should be monitored.
To see Spark’s full report on PSMT stock, click here.
Executive/Board Changes
PriceSmart Announces New CEO Appointment for 2025
Positive
Mar 3, 2025
On March 3, 2025, PriceSmart announced that Robert Price will step down as Interim CEO on August 31, 2025, transitioning to Executive Chairman of the Board. David Price, currently the Executive Vice President and Chief Transformation Officer, will assume the role of CEO on September 1, 2025. This leadership transition is expected to ensure continuity and uphold the company’s values, with David Price’s extensive experience within PriceSmart positioning him as a capable successor. The Board of Directors unanimously approved this succession plan, highlighting confidence in David Price’s leadership to continue expanding the business and enhancing shareholder value.
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.