PriceSmart, Inc.
PriceSmart, Inc. Fundamental Analysis
PriceSmart, Inc. (PSMT) shows weak financial fundamentals with a PE ratio of 31.84, profit margin of 2.73%, and ROE of 11.94%. The company generates $5.5B in annual revenue with moderate year-over-year growth of 7.25%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 51.7/100 based on profitability, valuation, growth, and balance sheet metrics. The C grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze PSMT's fundamental strength across five key dimensions:
Efficiency Score
WeakPSMT struggles to generate sufficient returns from assets.
Valuation Score
WeakPSMT trades at a premium to fair value.
Growth Score
ModeratePSMT shows steady but slowing expansion.
Financial Health Score
ExcellentPSMT maintains a strong and stable balance sheet.
Profitability Score
WeakPSMT struggles to sustain strong margins.
Key Financial Metrics
Is PSMT Expensive or Cheap?
P/E Ratio
PSMT trades at 31.84 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, PSMT's PEG of 19.18 indicates potential overvaluation.
Price to Book
The market values PriceSmart, Inc. at 3.60 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 14.84 times EBITDA. This signals the market has high growth expectations.
How Well Does PSMT Make Money?
Net Profit Margin
For every $100 in sales, PriceSmart, Inc. keeps $2.73 as profit after all expenses.
Operating Margin
Core operations generate 4.46 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $11.94 in profit for every $100 of shareholder equity.
ROA
PriceSmart, Inc. generates $6.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
PriceSmart, Inc. generates limited operating cash flow of $300.29M, signaling weaker underlying cash strength.
Free Cash Flow
PriceSmart, Inc. generates weak or negative free cash flow of $128.13M, restricting financial flexibility.
FCF Per Share
Each share generates $4.16 in free cash annually.
FCF Yield
PSMT converts 2.61% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
31.84
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
19.18
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.60
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.89
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.25
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.33
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.06
vs 25 benchmark
ROCE
Return on capital employed
0.15
vs 25 benchmark
How PSMT Stacks Against Its Sector Peers
| Metric | PSMT Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 31.84 | 23.21 | Worse (Expensive) |
| ROE | 11.94% | 1251.00% | Weak |
| Net Margin | 2.73% | -5497.00% (disorted) | Weak |
| Debt/Equity | 0.25 | 0.79 | Strong (Low Leverage) |
| Current Ratio | 1.33 | 2.44 | Neutral |
| ROA | 6.16% | -200095.00% (disorted) | Weak |
PSMT outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews PriceSmart, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
59.37%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
90.61%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthFCF CAGR
1.47%
Industry Style: Defensive, Dividend, Low Volatility
Growing