Fact based stock research
Primo Water (TSX:BCB)

CA74167P1080

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Primo Water stock research in summary

primowatercorp.com

ANALYSIS: With an Obermatt Combined Rank of 82 (better than 82% compared with investment alternatives), Primo Water (Soft Drinks, USA) shares have much better financial characteristics than comparable stocks. Shares of Primo Water are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives). But they show above-average growth (Growth Rank of 95) and are safely financed (Safety Rank of 50, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 82, is a strong buy recommendation based on Primo Water's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Primo Water exhibits low value (Obermatt Value Rank of 41), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 95). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 50) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	41
Growth Rank	95
Safety Rank	50
Combined Rank	82

Country	USA
Industry	Soft Drinks
Index	TSX Composite
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Primo Water

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	67	57	62	41
GROWTH
GROWTH	11	23	25	95
SAFETY
SAFETY	1	1	4	50
SENTIMENT
SENTIMENT	n/a	62	90	^new
360° VIEW
360° VIEW	n/a	15	37	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 29-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Primo Water is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	67	57	62	41
GROWTH
GROWTH	11	23	25	95
SAFETY
SAFETY	1	1	4	50
COMBINED
COMBINED	1	6	6	82

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Primo Water the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Primo Water shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Primo Water. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 53, which means that the stock price is lower compared with invested capital than for 53% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 33 which means the stock price compared with what market professionals expect for future profits is higher than 67% of comparable companies, indicating a low value concerning Primo Water's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 53 and for the dividend yields rank which is lower than for 59% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Primo Water's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Primo Water, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	82	69	55	33
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	9	38	47	26
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	65	67	65	53
DIVIDEND YIELD
DIVIDEND YIELD	68	53	54	41
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	67	57	62	41

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Primo Water; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 95 (better than 95% compared with alternatives) for 2024, Primo Water shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all four indicators above average for Primo Water. Sales Growth has a value of 72, which means that, currently, professionals expect the company to grow more than 72% of its competitors. The same is valid for Profit Growth with a value of 92 and for Capital Growth with 96. In addition, Stock Returns had an above-average rank value of 95, which means they have been higher than 95% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 95, is a buy recommendation for growth and momentum investors. Since all Growth Ranks are positive, Primo Water exhibits above-average growth momentum. This could be due to a uniquely strong market position, proprietary technology, or an extensive corporate acquisition strategy. Growth investors will find this an attractive investment opportunity, unless they expect that the current phase is transitory and will deteriorate in the future. The current performance could also be a temporary recovery from a very low point, such as a turn-around situation. In the case of a turn-around, the current performance may or may not be followed by a continuing positive development. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	11	20	6	72
PROFIT GROWTH
PROFIT GROWTH	40	73	47	92
CAPITAL GROWTH
CAPITAL GROWTH	n/a	24	27	96
STOCK RETURNS
STOCK RETURNS	30	45	61	95
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	11	23	25	95

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Primo Water.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 50 (better than 50% compared with alternatives), the company Primo Water has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Primo Water is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Primo Water and the other two below average. Refinancing is at 71, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 71% of its competitors. But Leverage is high with a rank of 40, meaning the company has an above-average debt-to-equity ratio. It has more debt than 60% of its competitors. Liquidity is also on the riskier side with a rank of 25, meaning the company generates less profit to service its debt than 75% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 50 (better than 50% compared with alternatives), Primo Water has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Primo Water are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Primo Water and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	10	22	26	40
REFINANCING
REFINANCING	16	7	13	71
LIQUIDITY
LIQUIDITY	22	17	18	25
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	1	1	4	50

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Primo Water and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	79	79	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	50	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	14	98	^new
MARKET PULSE
MARKET PULSE	n/a	86	85	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	62	90	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Primo Water.
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