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Primerica, Inc. (PRI) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Primerica, Inc. (PRI)

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Intrinsic Value (DCF)

Current$267.79
→
Intrinsic$231.19
-14%
$146.36$231.19$392.44
Market implies 13% growth for 5 years
PRI appears fairly valued — current price aligns with our DCF estimate.
At $268, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (10%).
Range: Bear $146 → Bull $392. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →6%8%10%12%
8%$282$311$342$375
10%$190$210$231$254
12%$139$154$170$187
14%$107$118$131$144

Bull Case

  • Bull case ($392) offers 47% upside at 12% growth, 9% discount
  • Conservative 10% growth assumption is achievable based on track record

Bear Case

  • Bear case ($146) implies 45% downside at 8% growth, 12% discount
  • Price reflects 13% growth expectations vs 10% historical — high bar to clear
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5-Year Net Income Projection

Year 1$516.28M
Year 2$566.48M
Year 3$621.58M
Year 4$682.02M
Year 5$748.35M
Terminal$11.01B

📐 Model Inputs

Growth Rate9.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$470.52MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

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Frequently Asked Questions

Is PRI stock undervalued or overvalued?
🟡 FAIRLY VALUED

PRI trades at $267.79, within 10% of our $231.19 intrinsic value estimate. At 10.0% WACC and 9.7% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $154.33 (bear) to $335.61 (bull).

What is PRI's intrinsic value?

Using a 5-year DCF model: Base FCF of $471M, projected at 9.7% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.27B net debt and dividing by 0.03B shares: Bear $154.33 | Base $231.19 | Bull $335.61. Current price $267.79 implies -11% to base case.

How is PRI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 9.7% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($9.17B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 19.5x.