PRM · Perimeter Solutions
Conviction · Medium · more likely to lead the S&P 500 over the next three months, by a modest margin
Wrong if: a daily close below $27.00
Note written ·
How this view changed
- · Rated Medium. Results, 5 November 2026: Q3 2026 Fire Safety adjusted EBITDA rose 14% to $201.6M and net sales rose 24% to $389.9M, resolving the prior note's third-quarter earnings debate despite an adjusted EPS miss ($0.85 vs $0.96).
Price against the kill line
8.7% clear of its kill line on the 13 November 2026 close.
How to read this
The red mark is the price level of the published kill line: a close through it (a weekly close, on a weekly line) would prove the research note wrong on price. The dot is where the stock closed on 13 November 2026; a dot left of the mark has closed through its line.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close below $27.00, on record since 10 November 2026. The shares are down 9.9% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close below $27.00, well under the $28.14 close on the 5 November 2026 report date, which would erase the post-report advance. Fire Safety adjusted EBITDA below the prior-year quarter in the fourth-quarter 2026 report would also break the case.
Research onlyNot in the portfolio.
Key figures from the filings · Materials
Quarter to 30 September 2026, filed 5 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 390
- Revenue, change on a year (%)
- +23.6
- Gross margin (%)
- 61.1
- Operating margin (%)
- 106.8
- Free cash flow, four quarters ($M)
- 53.9
- Net cash, cash less debt ($M)
- −1,095
- Price to earnings (×)
- 86.6
- Enterprise value to sales (×)
- 7.1
All filed numbers
What Perimeter Solutions reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 390 | +23.6 | 61.1 | 106.8 |
| first filed | 214 | +31.5 | 55.1 | −95.0 |
| first filed | 125 | +73.6 | 40.6 | 58.0 |
| first filed | 103 | +19.2 | 45.2 | −160.7 |
| first filed | 315 | +9.4 | 63.1 | −27.7 |
| first filed | 163 | +27.8 | 62.4 | −16.1 |
| Pre-tax income ($M) | 395 |
| Net income ($M) four quarters: 55.5 | 305 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +19.2 |
| Operating cash flow ($M) | 92.1 |
| Capital spending ($M) | 38.2 |
| Free cash flow ($M) | 53.9 |
| Cash and short-term investments ($M) | 116 |
| Debt ($M) long-term debt | 1,211 |
| Net cash, cash less debt ($M) | −1,095 |
| Deferred revenue ($M) +72.3% on a year | 16.6 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 177 |
| Inventory ($M) | 222 |
| Shareholders' equity ($M) | 1,330 |
| Market value ($M) | 4,810 |
| Enterprise value, market value plus net debt ($M) | 5,905 |
| Enterprise value to sales (×) | 7.1 |
| Enterprise value to operating income (×) | 48.9 |
| Price to earnings (×) | 86.6 |
| Price to book value (×) | 3.6 |
| Free-cash-flow yield (%) | 1.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.2% of shares outstanding sold short, 6.1 days of average trading to cover, +6.2% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $239.6M |
The thesis
Perimeter Group (formerly Perimeter Solutions), the maker of PHOS-CHEK wildfire retardant, is modestly more likely than not to beat the S&P 500 over three months, because Fire Safety profit grew 14% in the third quarter of 2026. The fourth-quarter 2026 report, expected around 26 February 2027, shows whether that growth survived the seasonally weak months and what debt of $1,210.9 million at 30 September 2026 costs.
The third-quarter release on 5 November 2026 showed Fire Safety adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $201.6 million, up 14% from $177.2 million a year earlier. Second-quarter growth in that segment was only 1%. Total net sales rose 24% to $389.9 million from $315.4 million, and adjusted EBITDA rose 20% to $223.5 million from $186.3 million.
The market has given back part of the post-report move. The shares closed at $31.58 on 9 November 2026 and at $29.63 on 12 November 2026, down 12.6% over three months and 22.4% below the 52-week intraday high of $38.17 reached on 18 June 2026. Adjusted earnings per share of $0.85 missed a $0.96 estimate, while net sales beat a $381.3 million estimate (company news, 5 November 2026).
Bullish and bearish views on Perimeter Solutions, Inc.
The bull case on Perimeter Solutions, Inc. (PRM), in brief: Fire Safety profit recovered. The bear case: cash generation lags earnings.
Bull case
- Fire Safety profit recovered. Segment net sales rose 14% to $312.6 million and segment adjusted EBITDA rose 14% to $201.6 million (third-quarter 2026 release, 5 November 2026). A third-party review puts the segment margin at 64.5%, against 60.9% in the second quarter.
- Specialty Products more than doubled profit. Net sales rose 84% to $77.3 million and adjusted EBITDA rose to $21.9 million from $9.1 million (third-quarter 2026 release, 5 November 2026).
- Monaco adds to Fire Safety. The acquisition closed on 30 July 2026 for $117.1 million net of cash acquired, funded from cash and the credit facility (third-quarter 2026 release).
- Analysts remain positive. Stockanalysis lists four analysts with an average rating of Buy and a consensus target of $41.50 as of 10 November 2026, about 40% above the 12 November 2026 close.
Bear case
- Cash generation lags earnings. Nine-month operating cash flow was $73.5 million against $219.5 million a year earlier. Cash fell to $115.9 million at 30 September 2026 from $325.9 million at 31 December 2025 (third-quarter 2026 release).
- Debt has nearly doubled. Long-term debt, net, was $1,210.9 million at 30 September 2026 against $669.1 million at 31 December 2025. Panabee attributes the rise to about $799 million of 2026 acquisitions and reports net interest expense up 118% to $64 million for nine months.
- Reported profit is distorted. Third-quarter net income of $304.5 million includes a $239 million gain on the founder advisory agreement, against a $248 million expense a year earlier (Panabee, citing the filing). Adjusted net income was $144.3 million against $125.5 million.
- Specialty supply is disrupted. Panabee reports that a third-party tolling facility in Sauget, Illinois cut base-business Specialty revenue by $6.8 million over nine months and forced the use of higher-cost suppliers.
- The earnings-per-share miss. Adjusted earnings per share of $0.85 fell short of the $0.96 estimate even as sales beat (company news, 5 November 2026).
Price setup
The shares closed at $28.14 on 5 November 2026, the day of the report, then rose to $29.50 on 6 November 2026 and $31.58 on 9 November 2026. They have since slipped: $30.72 on 10 November 2026, $30.67 on 11 November 2026 and $29.63 on 12 November 2026.
The 12 November 2026 close sits just under the 200-day average of $29.67 and above the 50-day average of $29.0 (adjusted daily closes). The 52-week closing low is $20.69 on 20 March 2026, and the 52-week intraday high is $38.17 on 18 June 2026.
Four analysts cover the shares per Stockanalysis, so one revision moves the average target. No earnings report falls inside the next 30 days.
Catalysts ahead
- ~26 February 2027 (est.): Fourth-quarter 2026 results. Shows whether the 14% Fire Safety profit growth carried into the seasonally weak quarter and whether management gives 2027 guidance.
What would change the view
A daily close below $27.00, well under the $28.14 close on the 5 November 2026 report date, which would erase the post-report advance. Fire Safety adjusted EBITDA below the prior-year quarter in the fourth-quarter 2026 report would also break the case.
The risks this note tracks, each with what would confirm it:
- Fire Safety profit growth fades after the peak season as the 5% federal price step-down and slower acres burned weigh on volume. Confirmed by: Fire Safety adjusted EBITDA below the prior-year level in the fourth-quarter 2026 report.
- Higher debt and weak cash conversion limit flexibility. Confirmed by: operating cash flow staying well below the prior year, further acquisitions funded with debt, or an equity issuance.
- Specialty Products supply disruption from the third-party Sauget, Illinois facility persists. Confirmed by: another quarter of falling base-business Specialty revenue and higher-cost sourcing.
- Thin analyst coverage lets a single target cut reset sentiment. Confirmed by: a published target cut from one of the four covering analysts, lowering the $41.50 consensus.
What it trades with
No theme cluster currently carries the shares. Revenue depends on federal wildfire budgets, mainly the U.S. Forest Service and Bureau of Land Management, and on fire-season severity, not on broad technology or consumer cycles. Specialty Products ties to industrial chemical demand, where supply disruption at a third-party facility is the stated drag.
The evidence, claim by claim (7)
- Third-quarter 2026 net sales $389.9 million, up 24% from $315.4 million; adjusted EBITDA $223.5 million, up 20% from $186.3 million. Perimeter Group third-quarter 2026 results release · as of
- Fire Safety third-quarter net sales $312.6 million (up 14%) and adjusted EBITDA $201.6 million (up 14%) versus $177.2 million a year earlier. Perimeter Group third-quarter 2026 results release · as of
- Specialty Products third-quarter net sales $77.3 million (up 84%) and adjusted EBITDA $21.9 million versus $9.1 million a year earlier. Perimeter Group third-quarter 2026 results release · as of
- Adjusted diluted earnings per share were $0.85 against a $0.96 estimate; net sales beat a $381.3 million estimate. Company news headline · as of
- Cash $115.9 million and long-term debt, net, $1,210.9 million at 30 September 2026; nine-month operating cash flow $73.5 million versus $219.5 million a year earlier. Perimeter Group third-quarter 2026 results release · as of
- Monaco acquisition completed on 30 July 2026; purchase price $117.1 million net of cash acquired. Perimeter Group third-quarter 2026 results release · as of
- Four analysts, average rating Buy, consensus target $41.50. Stockanalysis PRM page · as of
Sources
- Third quarter Net Income of $304.5M and Adjusted Net Income of $144.3M · finviz.com
- Perimeter's Debt-Funded Expansion Faces Integration and Leverage Hurdles · panabee.com
- Perimeter Group Inc. (PRM) · stockanalysis.com
- Perimeter Group (PRM) Q3 2026 earnings review · finsee.ai