Is Primo Brands Worth a Look After 34% Weekly Share Price Drop?

Wondering if Primo Brands is a bargain or a value trap? Let's break down what really matters for investors trying to make sense of this stock's price. The share price recently tumbled, sliding 34.2% over the last week and down 53.3% year-to-date. These movements are shifting perceptions about growth prospects and risks. Market chatter around Primo Brands has intensified since several industry analysts highlighted shifts in consumer preferences and rising competition in the beverage sector. Attention also spiked when regulatory changes were announced that could reshape key distribution channels. When it comes to valuation, Primo Brands scores a strong 5 out of 6 on our undervaluation checks. However, traditional models are only the beginning. Continue with us as we explore those approaches and reveal a more insightful way to judge if PRMB is genuinely undervalued.

Find out why Primo Brands's -39.5% return over the last year is lagging behind its peers.

Approach 1: Primo Brands Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's value by projecting future cash flows and discounting them back to today's dollars. This approach helps investors understand what a business could be worth based on its ability to generate cash in the future.

For Primo Brands, the current Free Cash Flow stands at $275 million. Analyst estimates predict significant growth, with Free Cash Flow expected to reach $1.26 billion by 2029. The DCF model uses these projections, with the first five years based on multiple analyst forecasts and additional years extrapolated by Simply Wall St. Over ten years, cash flows are expected to climb steadily as the company's operations expand.

According to this 2 Stage Free Cash Flow to Equity model, the intrinsic value of Primo Brands is estimated at $82.92 per share. This figure is 82.6% higher than the recent market price, suggesting the stock is currently trading far below its calculated fair value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Primo Brands is undervalued by 82.6%. Track this in your watchlist or portfolio, or discover 876 more undervalued stocks based on cash flows.PRMB Discounted Cash Flow as at Nov 2025

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Primo Brands.

Approach 2: Primo Brands Price vs Sales

The price-to-sales (P/S) ratio is often a preferred valuation measure for companies like Primo Brands, especially when earnings are less reliable due to industry dynamics or recent fluctuations. The P/S ratio lets investors assess how much they are paying for each dollar the company earns in sales, making it useful for comparing stocks within sectors where profit margins can vary or earnings can be volatile.

Story Continues

While growth prospects and risk profiles explain why 'typical' valuation multiples vary, companies with higher sales growth or lower risks usually command a higher P/S multiple, as investors expect those advantages to feed future profits. On the other hand, elevated competition or uncertain outlooks often push the fair P/S ratio down.

Currently, Primo Brands is trading at a P/S multiple of 0.82x, which is well below the beverage industry average of 2.12x and its peer group, which averages 3.30x. However, a more nuanced view comes from the Simply Wall St Fair Ratio metric, which blends factors like the company’s growth outlook, profit margins, industry, and market cap to calculate a tailored benchmark. With a Fair Ratio of 1.04x, Primo’s P/S sits modestly below what its fundamentals might justify, but the difference is less than 0.10. This precise, holistic approach means investors are seeing a valuation that aligns closely with expectations rather than a dramatic bargain or a caution flag.

Result: ABOUT RIGHTNYSE:PRMB PS Ratio as at Nov 2025

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Primo Brands Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your unique story about a company. It connects your estimates for Primo Brands’ future revenues, profit margins, and fair value to the reasons you believe in those numbers. Narratives bridge the gap between what you see happening in a business and what the numbers tell you, allowing you to turn your perspective into a financial forecast and a fair value you can easily compare to the current market price.

This tool is available right on Simply Wall St’s Community page and is used by millions of investors to make smarter decisions. Narratives empower you to decide when to buy or sell by showing how your view of fair value measures up against the latest price, and they automatically update as fresh information such as news, results, or regulatory announcements arrives. For example, one investor’s Narrative for Primo Brands might calculate fair value as high as $90 per share based on optimistic sales growth, while another sees fair value closer to $28 due to ongoing risks. With Narratives, you can confidently act on your story and adjust it as the facts change.

Do you think there's more to the story for Primo Brands? Head over to our Community to see what others are saying!NYSE:PRMB Community Fair Values as at Nov 2025

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.

Companies discussed in this article include PRMB.

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