Primerica distributes financial products to middle income households in the United States and Canada. The company operates in three segments: Term Life Insurance; Investment and Savings Products; and Corporate and Other Distributed Products. The company was founded in 1977 and is based in Duluth, Georgia.
PRI Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Primerica Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Primerica Inc ranked in the 63th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 149.5%. In terms of the factors that were most noteworthy in this DCF analysis for PRI, they are:
The stock's equity weight, or the proportion of capital from equity relative to debt, is 90. Notably, its equity weight is greater than 77.91% of US equities in the Financial Services sector yielding a positive free cash flow.
The business' balance sheet reveals debt to be 10% of the company's capital (with equity being the remaining amount). Approximately merely 21.45% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
PRI's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 46.75% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Primerica Inc? See APAM, CPTA, GBL, HRTG, and GSHD.