Every cloud has a silver lining, and for investors, PriceSmart Inc. (PSMT) could be that glimmer of hope in the Consumer Defensive sector. With a market valuation of $83.09 billion, PriceSmart has shown resilience in its
financial performance. The company's EBITDA stands at a robust $267.08 million, reflecting its strong operational efficiency. Despite a slight loss in net interest income of $1.1 million, the company's retained earnings are impressive at $817.6 million. The Price to Earnings ratio of 24.99X and Price to Book ratio of 2.36X further underscore the potential value this stock holds for investors. With a profit margin of 0.03% and a dividend yield of 0.01%, PriceSmart is a stock that warrants a closer look for those seeking an attractive investment opportunity. Currently, PriceSmart's Free Cash Flow Per Share remains relatively stable compared to the previous year. The Return on Invested Capital (Roic) is projected to increase to 0.07 in 2024, while the Days Sales Outstanding is expected to decrease to 1.62 in the same year. Despite the stability of these primary indicators, PriceSmart is not fully utilizing its potential. The recent surge in stock price may result in short-term fluctuations for individual investors. The company is responsive to market changes. Thus, PriceSmart can be considered as a potential investment for your portfolios.
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include PriceSmart income statement, its balance sheet, and the statement of cash flows. Potential PriceSmart investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although PriceSmart investors may use each financial statement separately, they are all related. The changes in PriceSmart's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on PriceSmart's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of PriceSmart
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of PriceSmart performance into the future periods or doing a reasonable stock valuation. The intrinsic value of PriceSmart shares is the value that is considered the true value of the share. If
the intrinsic value of PriceSmart is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares PriceSmart. Please read more on our
fundamental analysis page.
How effective is PriceSmart in utilizing its assets?
PriceSmart reports assets on its Balance Sheet. It represents the amount of PriceSmart resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, PriceSmart aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Consumer Staples Distribution & Retail space. To get a better handle on how balance sheet or income statements item affect PriceSmart volatility, please check the breakdown of all its
fundamentals.
Are PriceSmart Earnings Expected to grow?
The
future earnings power of PriceSmart involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of PriceSmart factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. PriceSmart
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of PriceSmart
expected earnings.
And What about dividends?
A dividend is the distribution of a portion of PriceSmart earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. PriceSmart dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. PriceSmart one year expected dividend income is about USD1.03 per share.
At this time, PriceSmart's
Dividends Paid is comparatively stable compared to the past year.
Dividend Paid And Capex Coverage Ratio is likely to gain to 1.16 in 2025, whereas
Dividend Yield is likely to drop 0.01 in 2025.
Investing in stocks that pay
dividends, such as stock of PriceSmart, is one of many strategies that are good for long-term investments. Ex-dividend dates are significant because investors in PriceSmart must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for PriceSmart. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
PriceSmart Gross Profit
PriceSmart Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing PriceSmart previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show PriceSmart Gross Profit growth over the last 10 years. Please check PriceSmart's
gross profit and other
fundamental indicators for more details.
Breaking it down
There are few distinct groups of PriceSmart stakehholders that the SEC considers insiders. Investors usually gain information through their work as corporate directors, officers, or employees. If these individuals share the information with a friend, family, or business partner and the person who receives the information exchanges stock in the company, he or shie is also an insider. Let's take a look at how the ownership of PriceSmart is distributed among investors.
Ownership Allocation
PriceSmart has a total of 30.52 Million outstanding shares. The majority of PriceSmart
outstanding shares are owned by
third-party entities. These institutional holders are usually referred to as non-private investors looking to secure positions in PriceSmart to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in PriceSmart. Please pay attention to any change in the institutional holdings of PriceSmart as this could imply that something significant has changed or is about to change at the company. Note that regardless of who owns the company, if the true value of the entity is less than the market is willing to pay for it, you may not be able to generate positive returns over time.
| Insiders8.5% | Institutions91.81% |
| Retail Investors | -0.31 |
| Insiders | 8.5 |
| Institutions | 91.81 |
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence PriceSmart's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over PriceSmart's decisions due to their larger holdings.
| 2021 | 2022 | 2023 | 2024 (projected) |
Other Current Liab | 90.0M | 112.1M | 129.0M | 135.4M | Total Assets | 1.8B | 2.0B | 2.3B | 2.4B |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. PriceSmart has an asset utilization ratio of 219.98 percent. This implies that the Company is making $2.2 for each dollar of assets. An increasing asset utilization means that PriceSmart is more efficient with each dollar of assets it utilizes for everyday operations.
| Non Current Assets Total1.4 B | | | Total Current Assets1.1 B | | | Net Tangible Assets755.8 M |
| Non Current Assets Total | 1.36 Billion | 40.1 |
| Non Currrent Assets Other | 94.6 Million | 2.78 |
| Other Current Assets | 65.04 Million | 1.91 |
| Total Current Assets | 1.06 Billion | 31.17 |
| Other Assets | 60 Million | 1.77 |
| Intangible Assets | 654,075 | 0.0192 |
| Net Tangible Assets | 755.82 Million | 22.24 |
As Benjamin Franklin once said, an investment in knowledge pays the best interest. This is particularly true when considering PriceSmart Inc. (PSMT), a leading player in the Consumer Defensive sector. The company's strong fundamentals, such as a healthy end period cash flow of $252.2 million and a robust net income from continuing operations of $109.2 million, make it an attractive investment opportunity. Despite a modest five-year return of 1%, PriceSmart's forward dividend yield of 0.0139 and a PE ratio of 22.52 suggest a stable earnings outlook. However, with a probability of bankruptcy standing at 3.03%, investors should exercise due diligence.
PriceSmart has a small chance to finish above $85 in 2 months
PriceSmart's stock, with a skewness of 0.42, indicates a relatively symmetrical distribution of returns, slightly favoring the positive side. This suggests a modest likelihood of substantial positive returns, hinting at the potential for the stock to exceed $85 within two months. However, the mild positive skewness implies this is not highly probable. Investors are advised to stay vigilant and track PriceSmart's performance and market conditions in the upcoming weeks. PriceSmart exhibits low volatility, as evidenced by its skewness of 0.42 and kurtosis of 1.21. Understanding
market volatility trends can assist investors in timing the market. Appropriate use of volatility indicators allows traders to gauge PriceSmart's stock risk against market volatility during bullish and bearish trends.
Increased volatility in bear markets can affect
PriceSmart's stock price, adding stress to investors as share values drop, often prompting portfolio rebalancing. In conclusion, PriceSmart (PSMT) presents a compelling growth investment case. The company's strong buy consensus from analysts, with
2 strong buys and only
1 hold, underpins the potential for significant upside. The possible upside price of
$86.62 and the analyst target price estimated value of
$86 both suggest a promising future for the stock, especially when compared to the current valuation market value of $83.09. The E P S estimate for next year is $4.22, indicating a healthy financial outlook. As we approach the fiscal year end in August, investors should consider the potential benefits of adding PriceSmart to their portfolio. .
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Rifka Kats do not own shares of PriceSmart. Please refer to our
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