Perimeter Solutions (NYSE:PRM) Releases Quarterly Earnings Results, Misses Estimates By $0.08 EPS

Key Points

• Perimeter Solutions missed quarterly estimates: The company reported adjusted earnings of $0.35 per share, $0.08 below consensus, while revenue of $213.81 million also fell short of expectations.
• Management expects Fire Safety earnings to improve: Resuming Defense Logistics Agency deliveries, CAL FIRE pricing, and a new DLA contract are expected to support second-half and longer-term growth.
• Growth opportunities are balanced by operational pressure: The $120 million Monaco acquisition adds recurring revenue from military fire-alarm systems, while disruption at the Sauget facility continues to weigh on Specialty Products results. Shares fell to $30.63, despite analysts maintaining a “Moderate Buy” consensus and a $43 average price target.

Perimeter Solutions (NYSE:PRM - Get Free Report) issued its quarterly earnings data on Friday. The company reported $0.35 earnings per share for the quarter, missing the consensus estimate of $0.43 by ($0.08), FiscalAI reports. The firm had revenue of $213.81 million during the quarter, compared to the consensus estimate of $216.89 million. Perimeter Solutions had a negative net margin of 26.93% and a positive return on equity of 18.29%.

Here are the key takeaways from Perimeter Solutions' conference call:

• Strong second-quarter results: Revenue increased 31% year over year to $313.8 million, while adjusted EBITDA rose 16% to $105.6 million; year-to-date adjusted EBITDA was up 34% to $146.7 million.
• Fire Safety earnings are expected to improve in the second half: Management said the 5% federal contract pricing step-down and temporary pause in Defense Logistics Agency foam deliveries weighed on Q2, but deliveries are resuming and CAL FIRE pricing should offset much of the impact, with the new DLA contract ramping into 2027 and 2028.
• Monaco acquisition expands the portfolio: Perimeter paid approximately $120 million for a provider of proprietary fire alarm and mass-notification systems installed at more than 200 U.S. military sites. More than 95% of Monaco’s sales come from its installed base, creating an annuity-like aftermarket stream, while management sees additional growth across military branches and regulated government markets.
• Long-term retardant demand is supported by fleet expansion: Canada is adding four new 4,000-gallon retardant-capable air tankers, while Texas, other U.S. states, and European markets are also expanding aerial firefighting infrastructure, potentially creating meaningful multi-year volume growth.
• PDI remains pressured by the Sauget facility disruption: Production problems at Flexsys’ Illinois plant continued to reduce Specialty Products earnings, although Perimeter expects conditions to improve as capacity is restored and is taking steps to reduce PDI’s reliance on the facility.

Perimeter Solutions Price Performance

Shares of NYSE PRM traded down $6.60 during mid-day trading on Friday, reaching $30.63. 6,417,954 shares of the company traded hands, compared to its average volume of 1,318,354. Perimeter Solutions has a fifty-two week low of $15.43 and a fifty-two week high of $38.17. The firm has a market cap of $5.00 billion, a PE ratio of -22.86 and a beta of 1.90. The stock has a fifty day simple moving average of $33.95 and a 200-day simple moving average of $29.33. The company has a debt-to-equity ratio of 1.01, a current ratio of 3.09 and a quick ratio of 1.61.

Analyst Upgrades and Downgrades

Several equities research analysts have commented on the stock. Wall Street Zen lowered shares of Perimeter Solutions from a "buy" rating to a "hold" rating in a research note on Sunday, July 12th. Weiss Ratings raised Perimeter Solutions from a "sell (d+)" rating to a "hold (c-)" rating in a report on Wednesday. Morgan Stanley boosted their price target on Perimeter Solutions from $35.00 to $40.00 and gave the stock an "overweight" rating in a research report on Monday, May 11th. Zacks Research cut Perimeter Solutions from a "strong-buy" rating to a "hold" rating in a research note on Friday, July 10th. Finally, JPMorgan Chase & Co. began coverage on Perimeter Solutions in a report on Thursday, July 9th. They set an "overweight" rating and a $50.00 price target on the stock. Four investment analysts have rated the stock with a Buy rating and two have assigned a Hold rating to the company. According to data from MarketBeat, the company currently has a consensus rating of "Moderate Buy" and an average price target of $43.00.

Insider Transactions at Perimeter Solutions

In other Perimeter Solutions news, CFO Kyle Sable sold 49,540 shares of the stock in a transaction on Wednesday, May 13th. The stock was sold at an average price of $33.09, for a total transaction of $1,639,278.60. Following the completion of the transaction, the chief financial officer directly owned 49,540 shares of the company's stock, valued at approximately $1,639,278.60. This trade represents a 50.00% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, CEO Haitham Khouri sold 117,511 shares of Perimeter Solutions stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $31.19, for a total value of $3,665,168.09. Following the transaction, the chief executive officer owned 1,874,615 shares in the company, valued at approximately $58,469,241.85. This trade represents a 5.90% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last ninety days, insiders have sold 6,385,514 shares of company stock valued at $217,464,393. 13.10% of the stock is currently owned by company insiders.

Institutional Inflows and Outflows

Hedge funds have recently bought and sold shares of the company. Arax Advisory Partners raised its position in Perimeter Solutions by 122.8% in the fourth quarter. Arax Advisory Partners now owns 1,047 shares of the company's stock worth $29,000 after acquiring an additional 577 shares in the last quarter. Northwestern Mutual Wealth Management Co. grew its stake in shares of Perimeter Solutions by 51.6% in the 4th quarter. Northwestern Mutual Wealth Management Co. now owns 1,143 shares of the company's stock worth $31,000 after purchasing an additional 389 shares during the last quarter. EverSource Wealth Advisors LLC acquired a new position in shares of Perimeter Solutions in the 2nd quarter worth approximately $42,000. Ancora Advisors LLC raised its holdings in shares of Perimeter Solutions by 219.0% in the 3rd quarter. Ancora Advisors LLC now owns 3,190 shares of the company's stock worth $71,000 after purchasing an additional 2,190 shares in the last quarter. Finally, Kemnay Advisory Services Inc. bought a new stake in shares of Perimeter Solutions in the 4th quarter worth approximately $99,000. 89.93% of the stock is owned by institutional investors and hedge funds.

About Perimeter Solutions

Perimeter Solutions Ltd. NYSE: PRM is a global specialty chemicals company focused on delivering performance-driven solutions for the oil and gas, coatings, plastics, water treatment and packaging markets. Established as an independent publicly traded company in December 2019 following its spin-off from NewMarket Corporation, Perimeter Solutions has positioned itself as a leading provider of highly engineered chemical products designed to optimize upstream oil recovery, protect infrastructure and enhance the performance of industrial processes.

The company's core product portfolio spans several key segments.

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