Pricesmart Intrinsic Value Calculation – Analyzing PriceSmart,’s Financials to Determine Stock Performance
December 20, 2023
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PRICESMART ($NASDAQ:PSMT): PriceSmart, Inc. (PSMT) is a publicly traded membership-based warehouse club company focused on serving businesses and consumers in Central America, the Caribbean, and Colombia. The company operates a chain of warehouse clubs with a variety of merchandise, including groceries, electronics, home furnishings, and apparel. Recently, PriceSmart has been gaining attention as its stock price has been increasing. As such, it is worth analyzing the company’s financials to better understand the factors that have contributed to this stock performance. This increase in sales is due in part to the opening of new locations and an increase in membership sign-ups. This increase in the operating margin is largely due to cost-savings initiatives implemented by the company.
Additionally, PriceSmart has been successful in reducing its debt load and cash flow has improved significantly over the past year. This reduction in debt, coupled with improved profitability, has helped strengthen the company’s balance sheet and improve cash flow. Overall, PriceSmart’s financials have been strong and have played a role in increasing its stock price recently. The company’s continued focus on managing its costs, reducing debt, and improving profitability have all contributed to the rise in its stock price. By continuing to focus on these areas, PriceSmart should be able to maintain its strong financial performance and positive stock performance going forward.
Share Price
PriceSmart, Inc. has been closely monitored in recent weeks as investors analyze the company’s financials to determine stock performance. On Monday, PRICESMART stock opened at $74.3 and closed at $73.7, representing a decrease of 0.7% from the previous closing price of 74.2. This decline in stock value is likely linked to the company’s financials, as investors take into account PriceSmart’s revenue, profits, cash flow, debt levels, and other financial metrics in order to make informed decisions about their investments.
It is important to note that stock performance can be significantly affected by changes in the macroeconomy, the company’s competitors, and various other external factors. By understanding PriceSmart’s financials and taking into account the broader economic environment, investors can make more informed and successful decisions regarding their investments in PRICESMART. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Pricesmart. PriceSmarts_Financials_to_Determine_Stock_Performance”>More…
| Total Revenues | Net Income | Net Margin |
| 4.41k | 107.89 | 2.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Pricesmart. PriceSmarts_Financials_to_Determine_Stock_Performance”>More…
| Operations | Investing | Financing |
| 257.33 | -222.08 | -41.05 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Pricesmart. PriceSmarts_Financials_to_Determine_Stock_Performance”>More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 2.01k | 898.57 | 35.74 |
Key Ratios Snapshot
Some of the financial key ratios for Pricesmart are shown below. PriceSmarts_Financials_to_Determine_Stock_Performance”>More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.8% | 17.4% | 4.1% |
| FCF Margin | ROE | ROA |
| 2.6% | 10.3% | 5.6% |
Analysis – Pricesmart Intrinsic Value Calculation
At GoodWhale, we recently conducted an analysis of PRICESMART‘s wellbeing. After performing various financial analyses, including gathering information from the company’s financial statements, market conditions, and competitor activity, we’ve calculated that the intrinsic value of PRICESMART share is around $87.6. This figure is calculated using our proprietary Valuation Line. Currently, PRICESMART stock is traded at $73.7, which our analysis suggests is a fair price but one that is undervalued by 15.9%. This could present an opportunity for investors to consider acquiring shares at a lower price. More…
Peers
The company was founded in 1976 and is headquartered in San Diego, California. As of 2018, it had 29 locations. Pricesmart‘s main competitors are Walmart Inc, Sprouts Farmers Market Inc, and Costco Wholesale Corp. Pricesmart is a much smaller company than its competitors, but it has been growing rapidly in recent years. Pricesmart’s competitive advantage lies in its low prices and convenience. The company has been able to keep its prices low by operating on a smaller scale than its competitors and by sourcing its products directly from manufacturers. Pricesmart’s convenience comes from its membership model, which allows customers to shop online or in-store without having to pay a membership fee.
– Walmart Inc ($NYSE:WMT)
As of 2022, Walmart Inc has a market cap of 386.32B and a Return on Equity of 16.44%. Walmart Inc is an American multinational retail corporation that operates a chain of hypermarkets, discount department stores, and grocery stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in 1962 and incorporated on October 31, 1969. As of January 31, 2020, Walmart has 11,484 stores and clubs in 27 countries, operating under 59 different names. The company operates under the name Walmart in the United States and Canada, as Walmart de México y Centroamérica in Mexico and Central America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in India. It has wholly owned operations in Argentina, Chile, Canada, and South Africa. Since August 2018, Walmart holds only a minority stake in Walmart Brasil, with 20% of the company’s shares, and private equity firm Advent International holding 80% ownership of the company.
– Sprouts Farmers Market Inc ($NASDAQ:SFM)
Sprouts Farmers Market Inc is a grocery store chain that specializes in selling fresh, natural, and organic foods. The company has a market cap of 3.17B as of 2022 and a Return on Equity of 21.14%. Sprouts Farmers Market Inc was founded in 2002 and is headquartered in Phoenix, Arizona.
– Costco Wholesale Corp ($NASDAQ:COST)
Costco Wholesale Corp is a publicly traded company with a market cap of 221.97B as of 2022. The company has a return on equity of 24.62%. Costco is a membership-only warehouse club that offers a wide selection of merchandise, including food, electronics, and home goods.
Summary
Investors analyzing PriceSmart, Inc.’s stock have been encouraged by the company’s strong financial performance in recent quarters. Revenue has grown steadily, and profits have remained relatively consistent. This has been reflected in the stock price, which has risen significantly over the past year. PriceSmart’s balance sheet is also in good shape, with a healthy cash-to-debt ratio and manageable debt levels.
Analysts have noted that the company’s operating expenses have remained well-controlled, which has enabled it to turn a profit despite the current competitive landscape. PriceSmart’s ability to generate strong returns, despite economic headwinds, has been seen as a good sign for investors.
