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GuruFocus has detected 5 Warning Signs with Primo Water Corp $PRMW.
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Primo Water Corp (NAS:PRMW)
Intrinsic Value: Projected FCF
$1.06 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Primo Water Corp's projected FCF intrinsic value is $1.06. The stock price of Primo Water Corp is $13.07. Therefore, Primo Water Corp's Price to Intrinsic Value: Projected FCF Ratio of today is 12.3.

PRMW' s Price-to-Intrinsic-Value-Projected-FCF Range Over the Past 10 Years
Min: 8.35   Max: 121.3
Current: 12.33

8.35
121.3

During the past 9 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Primo Water Corp was 121.30. The lowest was 8.35. And the median was 12.81.

PRMW's Price-to-Intrinsic-Value-Projected-FCF is ranked lower than
94% of the 54 Companies
in the Global Beverages - Soft Drinks industry.

( Industry Median: 1.77 vs. PRMW: 12.33 )

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding


Here Primo Water Corp's FCF(6 year avg) is calculate as

Primo Water Corp Quarterly Data

201412201503201506201509201512201603201606201609201612201703
total_freecashflow 3.70.45.40.41.9-0.22.61.52.6-4.5
201206201209201212201303201306201309201312201403201406201409
total_freecashflow -1.01.90.33.30.51.5-3.52.9-0.8-2.9
201106201109201112201203
total_freecashflow -7.0-8.6-9.9-0.0

Add all the Free Cash Flow together and divide 6 will get Primo Water Corp's FCF(6 year avg) = $-1.58.

Primo Water Corp's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Mar17)*0.8)/Shares Outstanding
=(10.265723347*-1.57983333333+63.006*0.8)/32.364
=1.06

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Primo Water Corp's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

Price to Intrinsic Value: Projected FCF=Share Price/Intrinsic Value: Projected FCF
=13.07/1.0563177625
=12.37

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Primo Water Corp Annual Data

Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15Dec16
Projected FCF 0.000.000.000.000.000.000.00-1.75-0.621.47

Primo Water Corp Quarterly Data

Dec14Mar15Jun15Sep15Dec15Mar16Jun16Sep16Dec16Mar17
Projected FCF -1.75-1.53-0.95-0.86-0.62-0.49-0.060.101.471.06
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