PriceSmart owns and operates membership shopping warehouse clubs in Latin American and the Caribbean. The company was founded in 1994 and is based in San Diego, California.
PSMT Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Pricesmart Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Pricesmart Inc ranked in the 63th percentile in terms of potential gain offered. Moreover, under all the scenarios we modelled, the output consistently forecasted positive returns. The most interesting components of our discounted cash flow analysis for Pricesmart Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 16.2 -- which is good for besting 82.19% of its peer stocks (US stocks in the Consumer Defensive sector with positive cash flow).
PSMT'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 30.94% of tickers in our DCF set.
Pricesmart Inc's effective tax rate, as measured by taxes paid relative to net income, is at 23 -- greater than 85.79% of US stocks with positive free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as PSMT, try GHC, STZ, SJM, UL, and HELE.
Image source The bulk discount warehouse stores in the US - Costco (COST) and BJ's (BJ) - have benefited enormously from stay-at-home orders since the pandemic began. These stores were well-positioned to service customer needs not only because they were deemed essential - and could therefore operate during the worst...
DUBLIN--(BUSINESS WIRE)--The "PriceSmart - Buying, Merchandising & Operating" report has been added to ResearchAndMarkets.com's offering. The report provides all the information needed to prepare and sell PriceSmart internationally. Written by a former warehouse club buyer, the report bridges the information gap between what you know and what club buyers want and provides a clear window on this growing $3.1 billion Latin American and Caribbean club operator. Key Information Included Categor
DUBLIN--(BUSINESS WIRE)--The "Warehouse Club Industry Guide" report has been added to ResearchAndMarkets.com's offering. The effect of COVID-19 has been dramatic on the warehouse club industry in the short term and likely represents an inflection point that will drive growth over the long term. The Warehouse Club Industry Guide (2020 edition) provides all the information needed to prepare and sell BJ's, Costco, PriceSmart and Sam's Club buyers in the United States and internationally. Written b
SAN DIEGO, Aug. 7, 2020 /PRNewswire/ -- PriceSmart, Inc. (NASDAQ: PSMT) today announced that for the month of July 2020 net merchandise sales increased 2.2% to $261.4 million from $255.8 million in July a year earlier. Foreign currency exchange fluctuations impacted net merchandise sales…