PriceSmart, Inc.'s (NASDAQ:PSMT) Stock Has Fared Decently: Is the Market Following Strong Financials?

Simply Wall St.09-13

Most readers would already know that PriceSmart's (NASDAQ:PSMT) stock increased by 7.7% over the past three months. Since the market usually pay for a company’s long-term financial health, we decided ...

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Since the market usually pay for a company’s long-term financial health, we decided ...</p>\n\n<a href=\"https://finance.yahoo.com/news/pricesmart-inc-nasdaq-psmt-stock-163706251.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"QID","symbol_name":"纳指两倍做空ETF","start_time":0,"source_url":"https://finance.yahoo.com/news/pricesmart-inc-nasdaq-psmt-stock-163706251.html","article_id":"2467857927","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/IWK1Ma49PkR_sGy.3QAETw--~B/aD00MzI7dz0xMTk0O2FwcGlkPXl0YWNoeW9u/https://media.zenfs.com/en/simply_wall_st__316/a025415f846c3c8277a9ccd53850ea0b"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2467857927","pubTimestamp":1726159026,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Most readers would already know that PriceSmart's  stock increased by 7.7% over the past three months. 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Put another way, it reveals the company's success at turning shareholder investments into profits.We then compared PriceSmart's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 14% in the same 5-year period, which is a bit concerning.In PriceSmart's case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 25% , which","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"QID":"纳指两倍做空ETF","IE00B3QW5Z07.USD":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (USD) ACC","IE00BGHQF748.EUR":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (EUR) ACC","BK4588":"碎股","SQQQ":"纳指三倍做空ETF","QLD":"纳指两倍做多ETF","BK4155":"大卖场与超市","PSQ":"纳指反向ETF","BK4112":"金融交易所和数据","LU2095319765.USD":"Natixis Thematics Subscription Economy R/A USD","TQQQ":"纳指三倍做多ETF","LU2210150020.SGD":"Natixis Thematics Subscription Economy R/A SGD","PSMT":"普尔斯玛特","LU2210149790.SGD":"Natixis Thematics Subscription Economy R/A SGD-H","NDAQ":"纳斯达克OMX交易所","IE00BKPKM429.USD":"NEUBERGER BERMAN GLOBAL SUSTAINABLE EQUITY \"A\" (USD) ACC",".IXIC":"NASDAQ Composite","BK4585":"ETF&股票定投概念","IE00B64PRP62.GBP":"GUINNESS GLOBAL MONEY MANAGERS \"C\" (GBP) ACC"},"translate_title":"PriceSmart，Inc.（纳斯达克：PSMT）的股票表现不错：市场是否遵循强劲的财务状况？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"PSMT":1,"NDAQ":1,".IXIC":1,"TQQQ":0.6,"SQQQ":0.6,"QLD":0.6,"QID":0.6,"PSQ":0.6,"NQmain":0.6,"MNQmain":0.6},"content_text":"Most readers would already know that PriceSmart's (NASDAQ:PSMT) stock increased by 7.7% over the past three months. Since the market usually pay for a company’s long-term financial health, we decided to study the company’s fundamentals to see if they could be influencing the market. Particularly, we will be paying attention to PriceSmart's  ROE today. \n Return on equity or ROE is a key measure used to assess how efficiently a company's management is utilizing the company's capital. Put another way, it reveals the company's success at turning shareholder investments into profits. \n Check out our latest analysis for PriceSmart \n How Do You Calculate Return On Equity? \n The formula for return on equity is: \n Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity \nSo, based on the above formula, the ROE for PriceSmart is:\n11% = US$125m ÷ US$1.1b (Based on the trailing twelve months to May 2024).\n The 'return' is the profit over the last twelve months. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.11 in profit. \n Why Is ROE Important For Earnings Growth? \n So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or \"retains\", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming all else is equal, companies that have both a higher return on equity and higher profit retention are usually the ones that have a higher growth rate when compared to companies that don't have the same features. \n A Side By Side comparison of PriceSmart's Earnings Growth And 11% ROE \n To start with, PriceSmart's ROE looks acceptable. Even when compared to the industry average of 11% the company's ROE looks quite decent. This certainly adds some context to PriceSmart's moderate 11% net income growth seen over the past five years. \n We then compared PriceSmart's net income growth with the industry and found that the company's growth figure is lower than the average industry growth rate of 14% in the same 5-year period, which is a bit concerning. \n\n\n\n  NasdaqGS:PSMT Past Earnings Growth September 12th 2024\n \n\n Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if PriceSmart is trading on a high P/E or a low P/E, relative to its industry. \n Is PriceSmart Using Its Retained Earnings Effectively? \n In PriceSmart's case, its respectable earnings growth can probably be explained by its low three-year median payout ratio of 25% (or a retention ratio of 75%), which suggests that the company is investing most of its profits to grow its business. \n Moreover, PriceSmart is determined to keep sharing its profits with shareholders which we infer from its long history of paying a dividend for at least ten years. \n Summary \n On the whole, we feel that PriceSmart's performance has been quite good. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. As a result, the decent growth in its earnings is not surprising. We also studied the latest analyst forecasts and found that the company's earnings growth is expected be similar to its current growth rate. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. \nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.1","shortVersion":"4.29.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2467857927"}