Primerica (NYSE:PRI) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

Primerica, Inc. (NYSE:PRI) is scheduled to report Q3 earnings results after markets close for trading on November 4, 2020.

The company is expected to report earnings of $2.35/share on revenue of $545.8 million. The consensus earnings per share (EPS) of $2.35/share is based on a poll of 6 analysts and represents a growth in eps of 4.2% over the same quarter last year, when the company reported earnings of $2.26/share.

The revenue forecast of $545.8 million based on a poll of 2 analysts implies a year-over-year (YoY) growth in revenue of 4.8%. Last year the company reported $520.7 million in revenue for the quarter.

Expected to report EPS growth of 4.2% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $545.84 $520.65 4.8%
EPS $2.35 $2.26 4.2%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from Primerica, Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $2.08 $2.44 17.3% Beat
Q1, 2020 $1.95 $2.05 5.1% Beat
Q4, 2019 $2.11 $2.22 5.2% Beat
Q3, 2019 $2.15 $2.26 5.3% Beat
Q2, 2019 $2.13 $2.21 4.0% Beat
Q1, 2019 $1.71 $1.74 1.8% Beat
Q4, 2018 $1.88 $2.01 6.7% Beat
Q3, 2018 $1.86 $1.93 3.8% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 5, 2020 $120.83 $130.92 8.4% Increase
April 29, 2020 $100.91 $103.91 3.0% Increase
February 11, 2020 $123.43 $130.44 5.7% Increase
November 6, 2019 $128.95 $129 0.0% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.48, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.48 implies a 0.7% chance of earnings manipulation.

Fundamentals And Technical Analysis

Primerica, Inc. is currently trading at $110.37/share, down −2.4% for the day. The company is trading at approximately 79.7% of its 52-week high of $138.05/share. The company’s stock price is down −15.7% since the last earnings report and down −6.0% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 40.23 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:PRI Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 12.03 and a forward P/E multiple of 12.67.

Primerica, Inc.’s current share price also implies a price-to-book (P/B) multiple of 2.65. The following table summarizes some other key fundamental ratios:

Data as of October 28, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $110.37
P/E Ratio 12.0x
P/E Ratio (Fwd) 12.7x
PEG Ratio 1.4
Total Debt / Total Capital 28.0%
Levered Free Cash Flow $587.9 million
EV / EBITDA 3.6x

Finbox

Primerica, Inc. is a mid-cap stock with a market capitalization of $4.47 billion and a total enterprise value of $5.846 billion. The company operates in the Financials sector and the Insurance industry.

Primerica, Inc., together with its subsidiaries, provides 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. It underwrites individual term life insurance products. The company also provides mutual funds and various retirement plans, managed investments, variable and fixed annuities, fixed indexed annuities, and segregated funds. In addition, it offers auto and homeowners’ insurance, home automation solutions, and mortgage loans; ID theft defense services; and insurance products, including supplemental medical and dental, accidental death, and disability for small businesses. Further, the company provides prepaid legal services that assist subscribers with legal matters, such as drafting wills, living wills and powers of attorney, trial defense, and motor vehicle-related matters. It distributes and sells its products through licensed sales representatives. Primerica, Inc. was founded in 1927 and is headquartered in Duluth, Georgia.

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