Primoris Services (NYSE:PRIM) Has A Pretty Healthy Balance Sheet
Primoris Services (NYSE:PRIM) Has A Pretty Healthy Balance Sheet
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' When we think about how risky a company is, we always like to look at its use of debt, since debt overload can lead to ruin. Importantly, Primoris Services Corporation (NYSE:PRIM) does carry debt. But the real question is whether this debt is making the company risky.
传奇基金经理陆李(受查利蒙格支持)曾说过:“最大的投资风险不是价格的波动性,而是你是否会遭受永久性的资本损失。”当我们考虑一家公司的风险性时,我们总是喜欢看它的债务使用情况,因为债务过重可能会导致毁灭性后果。重要的是,Primoris Services Corporation(纽交所:PRIM)确实存在负债。但真正的问题是这些负债是否会让公司产生风险。
What Risk Does Debt Bring?
债务带来了什么风险?
Debt and other liabilities become risky for a business when it cannot easily fulfill those obligations, either with free cash flow or by raising capital at an attractive price. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Of course, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.
当企业无法轻松地通过自由现金流或以有吸引力的价格筹集资本来履行债务义务时,债务和其他负债会对企业产生风险。在最坏的情况下,如果公司无法支付债权人的债务,它可能会破产。然而,更常见(但仍然昂贵)的情况是,一家公司必须在较低的股票价格下稀释股东,以便使债务得到控制。当然,很多公司使用债务来资助成长,不会产生任何负面后果。当我们检查债务水平时,我们首先考虑现金和债务水平一起考虑。
What Is Primoris Services's Net Debt?
Primoris Services的净债务是多少?
The image below, which you can click on for greater detail, shows that Primoris Services had debt of US$933.0m at the end of June 2024, a reduction from US$1.11b over a year. However, it also had US$209.2m in cash, and so its net debt is US$723.8m.
下图(单击以获取更详细的信息)显示,截至2024年6月底,Primoris Services的债务为9330万美元,相比去年的11.1亿美元有所减少。然而,它还有209.2万美元的现金,因此其净债务为7238万美元。
![big](https://usnewsfile.moomoo.com/public/MM-PersistNewsContentImage/7781/20240808/0-3327362c259c38710c5bc7557725d960-0-fe1995d3037ced24f39be115e2fba1af.png/big)
How Healthy Is Primoris Services' Balance Sheet?
Primoris Services的资产负债表健康状况如何?
Zooming in on the latest balance sheet data, we can see that Primoris Services had liabilities of US$1.48b due within 12 months and liabilities of US$1.27b due beyond that. On the other hand, it had cash of US$209.2m and US$1.72b worth of receivables due within a year. So its liabilities outweigh the sum of its cash and (near-term) receivables by US$825.9m.
深入研究最新的资产负债表数据,我们可以看到,Primoris Services在12个月内应付的负债总额为14.8亿美元,超过12个月到期的负债总额为12.7亿美元。另一方面,它有209.2万美元的现金和1.72亿美元的应收账款需要在一年内到期。因此,其负债总额超过了其现金和(短期)应收账款的总和8259万美元。
While this might seem like a lot, it is not so bad since Primoris Services has a market capitalization of US$2.73b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution.
虽然这可能看起来很多,但由于Primoris Services的市值为2.73亿美元,因此如果需要,它可能可以通过筹集资本来加强其资产负债表。但很明显,我们应该仔细考虑它是否能够在不稀释股东的情况下管理其负债。
In order to size up a company's debt relative to its earnings, we calculate its net debt divided by its earnings before interest, tax, depreciation, and amortization (EBITDA) and its earnings before interest and tax (EBIT) divided by its interest expense (its interest cover). Thus we consider debt relative to earnings both with and without depreciation and amortization expenses.
为了对公司的债务相对于其收益进行规模适应,我们计算其净债务与利息、税、折旧和摊销前收益(EBITDA)之比及其税前收益(EBIT)与利息支出之比(利息保障倍数)。因此,我们既考虑到不包括折旧和摊销费用在内的收益,又包括折旧和摊销费用的收益相对于债务。
Primoris Services's net debt is sitting at a very reasonable 1.8 times its EBITDA, while its EBIT covered its interest expense just 3.8 times last year. While these numbers do not alarm us, it's worth noting that the cost of the company's debt is having a real impact. We note that Primoris Services grew its EBIT by 26% in the last year, and that should make it easier to pay down debt, going forward. There's no doubt that we learn most about debt from the balance sheet. But ultimately the future profitability of the business will decide if Primoris Services can strengthen its balance sheet over time. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Primoris Services的净债务非常合理,为其EBITDA的1.8倍,而去年其EBIT覆盖其利息支出只有3.8倍。虽然这些数字并没有引起我们的警觉,但值得注意的是,公司的财务费用确实对其产生了真正的影响。我们注意到,Primoris Services在过去一年中的EBIT增长了26%,这应该使其更容易偿还债务。毫无疑问,我们从资产负债表中获取的关于负债方面的信息最为重要。但归根结底,这家公司的未来盈利能力将决定Primoris Services是否能够随着时间的推移加强其资产负债表。因此,如果您关注未来,可以查看这份免费报告,以显示分析师的利润预测。
Finally, while the tax-man may adore accounting profits, lenders only accept cold hard cash. So it's worth checking how much of that EBIT is backed by free cash flow. Over the last three years, Primoris Services reported free cash flow worth 5.9% of its EBIT, which is really quite low. That limp level of cash conversion undermines its ability to manage and pay down debt.
最后,尽管税务机构可能喜欢会计利润,但贷款人只接受冰冷的现金。因此,检查EBIt有多少备用自由现金流是值得的。在过去三年中,Primoris Services报告了价值为其EBIt的5.9%的自由现金流,这确实相当低。这种低矮的现金转换水平削弱了其管理和偿还债务的能力。
Our View
我们的观点
When it comes to the balance sheet, the standout positive for Primoris Services was the fact that it seems able to grow its EBIT confidently. However, our other observations weren't so heartening. In particular, conversion of EBIT to free cash flow gives us cold feet. When we consider all the factors mentioned above, we do feel a bit cautious about Primoris Services's use of debt. While we appreciate debt can enhance returns on equity, we'd suggest that shareholders keep close watch on its debt levels, lest they increase. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. We've identified 2 warning signs with Primoris Services , and understanding them should be part of your investment process.
就资产负债表而言,Primoris Services最引人注目的正面因素是它似乎可以自信地增长其EBIt。然而,我们的其他观察结果并不那么令人振奋。特别是,EBIt转换为自由现金流使我们不得不保持冷静。当我们考虑上述所有因素时,我们确实对Primoris Services的债务使用感到有些谨慎。虽然我们认为债务可能可以增强股本回报率,但我们建议股东密切关注其债务水平,以免其增加。我们毫不怀疑,我们从资产负债表中获取了关于债务方面的大部分信息。但归根结底,每个公司都可能存在超出资产负债表范围之外的风险。我们发现Primoris Services存在2个警示信号,了解它们应该是您投资过程中的一部分。
At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.
归根结底,专注于没有净债务的公司往往更好。您可以访问我们的特别列表,其中包括所有表现出盈利增长轨迹的公司。这是免费的。
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