Pricesmart Inc

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PSMT : NASDAQ : Services
$86.35 -0.35 | -0.4%
Today's Range: 86.0 - 88.0
Avg. Daily Volume: 111600.0
04/24/17 - 3:59 PM ET

Financial Analysis


PRICESMART INC's gross profit margin for the second quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. PRICESMART INC has weak liquidity. Currently, the Quick Ratio is 0.53 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 14.43% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY17 Q2 FY16
Net Sales ($mil)793.3777.93
EBITDA ($mil)51.1848.72
EBIT ($mil)39.7439.19
Net Income ($mil)27.2225.94


Balance Sheet Q2 FY17 Q2 FY16
Cash & Equiv. ($mil)182.81173.14
Total Assets ($mil)1156.951008.84
Total Debt ($mil)123.1391.07
Equity ($mil)671.69586.97


Profitability Q2 FY17 Q2 FY16
Gross Profit Margin17.2916.68
EBITDA Margin6.456.26
Operating Margin5.015.04
Sales Turnover2.552.86
Return on Assets7.889.24
Return on Equity13.5715.88
Debt Q2 FY17 Q2 FY16
Current Ratio1.381.41
Debt/Capital0.150.13
Interest Expense1.71.68
Interest Coverage23.3723.38


Share Data Q2 FY17 Q2 FY16
Shares outstanding (mil)30.4130.37
Div / share0.350.35
EPS0.90.85
Book value / share22.0919.33
Institutional Own % n/a n/a
Avg Daily Volume110974.0168433.0

Valuation


BUY. PRICESMART INC's P/E ratio indicates a premium compared to an average of 22.08 for the Food & Staples Retailing industry and a premium compared to the S&P 500 average of 24.92. For additional comparison, its price-to-book ratio of 3.98 indicates a premium versus the S&P 500 average of 2.99 and a premium versus the industry average of 3.72. The current price-to-sales ratio is well below the S&P 500 average, but above the industry average. Upon assessment of these and other key valuation criteria, PRICESMART INC proves to trade at a premium to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PSMT 29.22 Peers 22.08   PSMT 19.86 Peers 9.68

Premium. A higher P/E ratio than its peers can signify a more expensive stock or higher growth expectations.

PSMT is trading at a significant premium to its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PSMT is trading at a significant premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PSMT 24.99 Peers 19.10   PSMT 3.88 Peers 2.26

Premium. A higher price-to-projected earnings ratio than its peers can signify a more expensive stock or higher future growth expectations.

PSMT is trading at a significant premium to its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PSMT trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PSMT 3.98 Peers 3.72   PSMT -2.28 Peers 4.75

Average. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PSMT is trading at a valuation on par with its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, PSMT is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PSMT 0.91 Peers 0.55   PSMT 2.14 Peers 0.67

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PSMT is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

PSMT has a sales growth rate that significantly exceeds its peers.

 

 

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