Today were diving into the finances of Pilgrim’s Pride Corporation (PPC)One of the Heavyweights in the Chicken Production IndustryI’ve been crunching some numbers from their 5-year financials. Whether you’re a seasoned investor or just someone curious about where to park your money, this blog post will help.
First Impressions: Who is Pilgrim’s Pride?
If you’re not familyiar, pilgrim’s pride is a big name in the poultry game.
They’re one of the largest chicken producers in the US, with operations stretching to Puerto Rico, Mexico, and even International Markets Like the UK and Asia. They’re a subsidiary of JBS sa., The Brazilian meat-processing giantAnd they’ve been Around Since 1946.
From fresh chicken to full cooked nuggets, they supply retailers, restaurants, and grocery stores with a variety of products under brands Like just Bare and Gold Kist,
Enough about their business model, let’s talk numbers and see if this company is worth your investment dollars.
The Income Statement: Revenue Growth and Profitability Trends
Top Line (Revenue)
Let’s start with the top line: revenue. Over the past five years, pilgrim’s pride has shown a solid upward trend in total revenues:
| Sl | Year | Total Revenue (In Million $) |
Yoy growth |
|---|---|---|---|
| 1 | 2020 | 12,091.90 | , |
| 2 | 2021 | 14,777.46 | 22.21% |
| 3 | 2022 | 17,468.38 | 18.21% |
| 4 | 2023 | 17,362.22 | -0.61% |
| 5 | 2024 | 17,878.29 | 2.97% |
| , | , | Cagr (5YRS) | 8.14% |
That’s a compound annual growth rate (Cagr) of about 8.14% from 2020 to 2024, which is pretty impressive for a company in a company in a company in a company Industry Like Poultry,
The Jump from 2020 to 2021 (22.21% growth) likesly reflects a rebound from pandemic-related disrupts, with demand for chicken soning as restaurants reopanede and consucers stocked up on protein. However, Growth Slowed in 2023 (A Slight Dip of 0.6%) Before Ticking Up Again in 2024 (3%).
This tells me that ppc has been navigating some valati, Possibly due to inflation, supply chain issues, or flutting feed costs, but they’ve managed to keep revneue reveenue
Gross margin
Now, Let’s Talk Profitability. Their gross Profit Margin has been a bit of a rollercoaster:
| Sl | Year | Gross Margin (%) | Yoy growth |
|---|---|---|---|
| 1 | 2020 | 6.93% | , |
| 2 | 2021 | 9.24% | 33.33% |
| 3 | 2022 | 10.37% | 12.23% |
| 4 | 2023 | 6.44% | -37.90% |
| 5 | 2024 | 12.94% | 100.93% |
| , | , | Cagr (5YRS) | 13.30% |
The jump in 2024 to 12.18% is a standout. It sugges ppc has either improved operational efficiencies, negotiated better pricing, or managed input costs (like feed and labor) more effectively.
On the flip side, the dip in 2023 to 6.44% rays a red flag, margins took a hit, passibly due to respect costs or competitive pricing pressures.
Ebitda and net margin
When we drill down to ebitda margin and net income margin, the story gets even more interesting:
| Sl | Year | Ebitda margin | Net margin |
|---|---|---|---|
| 1 | 2020 | 4.82% | 0.78% |
| 2 | 2021 | 4.05% | 0.21% |
| 3 | 2022 | 9.22% | 4.27% |
| 4 | 2023 | 5.90% | 1.85% |
| 5 | 2024 | 12.18% | 6.08% |
| , | Cagr (5Y) | 20.37% | 50.79% |
The net income margin in 2024 (6.05%) is a huge improvement from the razor-thin 0.21% in 2021. This aligns with what I’ve seen on the news mentioning PPC’s Strong Q4 2024 Performance, With Adjusted Net Income Hitting $ 1.086 BillionBut let’s not get too excited just yet we must also look at how much at how much of net profit is getting translated into EPS (or EPS is getting diluted).
Earnings per Share (EPS)
| Sl | Year | EPS | Yoy growth |
|---|---|---|---|
| 1 | 2020 | 0.39 | , |
| 2 | 2021 | 0.13 | -66.67% |
| 3 | 2022 | 3.10 | 2284.62% |
| 4 | 2023 | 1.36 | -56.13% |
| 5 | 2024 | 4.57 | 236.03% |
| , | , | Cagr (5YRS) | 63.60% |
The EPS (earnings per share) also reflects a Good growth trendGrowing from $ 0.39 in 2020 to $ 4.57 in 2024 (CAGR 63%). That’s a solid sign for shareholders, but the variable in margins over the Years sugges PPC is sensitive to external factories like Commodity Pries or Regulatory Challenges
The Balance Sheet: Stability and Leverage
Next up, let’s peek at ppc’s balance sheet to undertand their financial health and how they’re managing assets, liabilitys, and rights.
| Sl | Year | Total Asset | Yoy growth |
|---|---|---|---|
| 1 | 2020 | 7,474.50 | , |
| 2 | 2021 | 8,913.21 | 19.25% |
| 3 | 2022 | 9,255.77 | 3.84% |
| 4 | 2023 | 9,810.36 | 5.99% |
| 5 | 2024 | 10,650.58 | 8.56% |
| , | , | Cagr (5YRS) | 7.34% |
Assets have grown steadily, up 42% from 2020 to 2024. But here’s where it gets tricky, let’s look at their liabilitys:
| Sl | Year | Total Debt | Yoy growth |
|---|---|---|---|
| 1 | 2020 | 2,570.67 | , |
| 2 | 2021 | 3,571.82 | 38.95% |
| 3 | 2022 | 3,502.63 | -1.94% |
| 4 | 2023 | 3,612.30 | 3.13% |
| 5 | 2024 | 3,466.24 | -4.04% |
| , | , | Cagr (5YRS) | 6.16% |
Debt spiked in 2021 but has sincere Since Stabilized, even dropping slightly in 2024. Still, $ 3.46 billion in Debt isn Bollywood.
When I calculate their debt-to-equity ratio (Total debt divided by total equity), here’s what i get:
| Sl | Year | D/e |
|---|---|---|
| 1 | 2020 | 1.00 |
| 2 | 2021 | 1.38 |
| 3 | 2022 | 1.23 |
| 4 | 2023 | 1.08 |
| 5 | 2024 | 0.81 |
The Debt-to-Equity Ratio has crept up, meaning ppc is related more on borrowed money related to shareholder right. This isn’t Necessarily a Dealbreaker, Especially Since Their Interest Coverage (Ebitda Divided by Interest Expens, which isnys isn Bollywood provided but can be inferred) Ebitda margin spike.
Still, it’s something to keep an eye on, especially if interest rates risk or if margins shrink again.
| Sl | Year | Total Debt | Yoy growth |
|---|---|---|---|
| 1 | 2020 | 547.62 | , |
| 2 | 2021 | 427.66 | -21.91% |
| 3 | 2022 | 400.99 | -6.24% |
| 4 | 2023 | 697.75 | 74.01% |
| 5 | 2024 | 2,040.83 | 192.49% |
| , | , | Cagr (5YRS) | 30.10% |
Whoa, look at that cash balance in 2024. It’s ballooned to over $ 2 billion, up from $ 547.62 million in 2020. This Gives ppc a nice liquidity cushion to weight Growth. It’s a reassuring sign of financial stability.
The Cash Flow Report: Where’s the Money Going?
Cash flow is where the rubber meets the road, it shows how well a company generates and manages its cash.
| Cash Flow Report (In MN USD) | 2020 | 2021 | 2022 | 2023 | 2024 |
|---|---|---|---|---|---|
| Cash from operations | 724.25 | 326.46 | 669.86 | 677.88 | 1,990.13 |
| Capital experture | -354.76 | -381.67 | -487.11 | -543.82 | -476.15 |
| Free cash flow | 333.65 | -12.96 | 160.9 | 94.48 | 1,467.05 |
| BEGINNING CASH Balance | 279.8 | 525.95 | 416.35 | 401.28 | 728.9 |
| Ending Cash Balance | 547.62 | 427.66 | 400.99 | 697.75 | 2,040.83 |
Operational Cash Flow In 2024 is a blockbuster at $ 1.99 billion, a Massive improvement from the $ 336.46 Million low in 2021. Operationally.
PPC has been investing heavily in its business, Capex Has Hovered Around $ 350–550 Million Annually. This could be for upgrading facilities, improvement efficiency, or expanding capacity, which is a good sign for long-term growth. However, it’s eating into their free cash flow (FCF).
That’s a healthy fcf, giving ppc flexibility to pay down debt, issue dividends, or reinvest.
The Reported FCF Tells a similar story, 2024 is a standout year, while 2021 was rough with negative fcf. This Volativity is something to watch, as it reflects how sensitive ppc’s cash flows are to operateal hICCUPS.
Price-Related data: is the stock a buy?
Now, let’s tie this all togeether with ppc’s current price-Related data as of early March 2025:
- Current Price: $ 54.78
- P/E (TTM): 11.92
- P/b: 3.03
- P/FCF: 8.76
- Shares Outstanding: 237.122 Million
- Market Cap: $ 54.78 × 237.122 Million = $ 12.99 billion (Approx.)
The P/e ratio of 11.92 is relatively low for a company with a 2024 EPS of $ 4.57, that’s a good sign it might be undeervalized compared to the broader market (the s & p 500 average p/e is typically ARPILY ARPICALY ARPICALY ARAPILY ARPILY ARPILY AREDIALY AREDIALY ARED
The P/b ratio of 3.03 Suggessts the market values ppc at three times its book value, which isn Bollywood high but indicates some growth expectations baked into the price.
The P/FCF of 8.76 is particularly attractive – FCF is a great metric for Valuation, and a low p/fcf sugges the stock could be a bargain.
The bigger picture
From a fundamental percective, PPC looks like a solid contender in 2025. Revenue growth Is Steady, Profitability is on the UPSWING (Especially in 2024), and their Cash position is Stronger Than ever. The stock’s valuation metrics also sugges it might be undertererMaking it an intriguing pick for value investors.
But there are risks to consider. The Poultry industry is notorously cyclicWith margins sensitive to feed costs, consumer demand, and regulatory pressures. PPC has also hado Had Legal Troubles in the Past, Like the $ 110.5 Million Fine in 2020 for Price-FIXING-WHIISES GOVERNANCE CONCERNS.
Plus, their debt levels, while manageable, could become a burden if Interest rates Climb or if Margins Shrink Again.
Conclusion
If you’re thinking about investment in pilgrim’s pride, here’s my two cents, the company is in a strong position heading into 2025, with improving Profitability and a Hefty Cash Reserve.
The stock looks also priced, especially with that low p/fcf ratio. But keep an eye on industry headwinds and their debt load.
If you’re a long-term investor who can stomach some valati, ppc might be worth a closer look. Maybe start with a small position and see how they perform over the next few Quarters.
What do you think? Are you consider ppc for your portfolio, or are you looking at other sectors? Let me know in the comments, i’d love to hear your thoughts.
And if you found this Deep Dive helpful, Share it with a friend who’s into investment.
Until Next Time, Happy Investing.
(Tagstotranslate) Investing in Poultry Industry (T) Pilgrim’s Pride Stock Analysis (T) PPC Financial Performance