Perimeter Solutions SA

Perimeter Solutions, Inc. reported second quarter 2026 adjusted EBITDA of $105.6 million, a 16% increase year-over-year, while net sales grew 31% to $213.8 million driven by recent acquisitions in the Specialty Products segment. The company also announced the acquisition of Monaco Enterprises for approximately $120 million in cash, a business that designs and manufactures fire alarm reporting and mass notification networks installed on more than 200 U.S. military installations, and is expected to contribute more than $11 million in annualized adjusted EBITDA. Fire Safety segment revenue rose 7% to $129.1 million, but adjusted EBITDA edged up only 1% to $78.8 million due to a 5% pricing step-down in the first year of a new U.S. federal retardant contract and minimal foam deliveries to the Defense Logistics Agency during a transition to a vendor-managed inventory structure under a five-year contract with a maximum value of $500 million. Specialty Products revenue doubled to $84.7 million, with adjusted EBITDA up 96% to $26.8 million, reflecting contributions from MMT and IMS, while PDI's adjusted EBITDA declined year-over-year due to production issues at the Sauget, Illinois P2S5 facility. The company reported a net loss of $181.6 million, compared to a net loss of $32.2 million in the prior year quarter, primarily reflecting a $266.3 million founder advisory fee, and adjusted diluted earnings per share was $0.35 versus $0.39 a year ago. Management highlighted secular tailwinds including a $316.7 million pan-Canadian aerial asset program over five years that adds 10 aircraft to the national fleet, and expects the recently signed CAL FIRE agreement to provide a larger financial contribution in the second half of the year.

Perimeter Solutions reported second-quarter 2026 adjusted EBITDA of $105.6 million, a 16% increase from the prior year, while year-to-date adjusted EBITDA rose 34% to $146.7 million. Fire Safety revenue grew 7% to $129.1 million for the quarter, though segment adjusted EBITDA edged up only 1% to $78.8 million, weighed down by a 5% pricing step-down in the federal retardant contract and minimal foam deliveries to the Defense Logistics Agency. Specialty Products revenue doubled to $84.7 million, driving segment adjusted EBITDA to $26.8 million from $13.7 million a year earlier. The company completed the acquisition of Monocle Enterprises, a niche market leader with over 95% recurring revenue, and ended the quarter with net debt leverage of approximately 3.1 times and total liquidity exceeding $150 million. Management expects Fire Safety margins to return to historical averages in the second half as DLA deliveries resume and the Cal Fire agreement offsets federal pricing headwinds.

Perimeter Solutions presents mixed valuation signals, with a discounted cash flow analysis suggesting the stock is 34.7% undervalued at an estimated intrinsic value of $52.58 per share, while its price-to-sales ratio of 7.9 times sits well above the chemicals industry average of 1.1 times and a peer group average near 2.8 times. The company generated approximately $100.2 million in free cash flow over the latest twelve months, and the DCF model assumes growing cash flows. A recent $195.6 million share sale by major holder WindAcre occurred alongside strong first-quarter results, which may explain why the market price has not moved closer to the DCF estimate. On Simply Wall St's checks, Perimeter Solutions screens as undervalued on three of six measures, reflecting a split between cash-flow-based intrinsic value and richer market multiples.

Zacks Equity Research has raised its current-year earnings estimate for Perimeter Solutions, a top-ranked Basic Materials stock, based on improved expectations. The upgrade draws fresh attention to the company’s operating outlook, particularly its fire retardants and specialty chemicals business under multi-year government and industrial contracts. A recently announced five-year USDA agreement, focused on domestic manufacturing and full-service federal operations, is seen as central to more consistent Fire Safety revenue and earnings. However, the biggest risk remains potential disruption or repricing of core agreements with agencies like the U.S. Wildland Fire Service or CAL FIRE, which the news does not materially change. Perimeter Solutions’ narrative projects $1.2 billion revenue and $1.0 billion earnings by 2029, requiring 18.7% yearly revenue growth and a $1.2 billion earnings increase from negative $190.1 million today.

Minerals Technologies has returned about 27% year-to-date, significantly outpacing the Basic Materials sector's average gain of 7.1%. The company, which holds a Zacks Rank #2 (Buy), saw its full-year earnings consensus estimate rise 1.3% over the past three months. Within the Chemical - Specialty industry, which has gained 13.4% on average this year, Minerals Technologies is also performing better. Another industry peer, Perimeter Solutions, SA, has returned 18.9% year-to-date and carries a Zacks Rank #2 (Buy), with its current-year EPS estimate up 21.9% over three months.

Zacks Investment Research added five stocks to its Zacks Rank Number 1 Strong Buy list on June 29. ORIX Corporation saw its current-year earnings consensus estimate increase 68.7% over the last 60 days. TTM Technologies saw a 27.1% increase, Albemarle Corporation a 55.6% increase, Idaho Strategic Resources a 14.3% increase, and Perimeter Solutions a 21.1% increase.

Perimeter Solutions is entering a phase where multi-year agreements, annual price escalators, and a larger services base make its Fire Safety business less dependent on any single fire season. The company's new five-year agreement with the United States Defense Logistics Agency covers fire suppression foam and services with a maximum contract value of $500 million, with financial impact expected to begin late in 2026 and reach a steadier run rate from 2028 onward. The CAL FIRE renewal adds another five-year anchor with pricing that aligns California with other large retardant customers and includes annual escalators. Service revenues in Fire Safety have grown from roughly $30 million a few years ago to $108.3 million in 2025, representing about 17% of total sales and providing a cushion against product-volume volatility. Specialty Products revenues rose 128% year over year to $79.6 million in the first quarter of 2026, further diversifying results. Shares of Perimeter Solutions have gained 29.9% so far this year, and the stock currently carries a Zacks Rank of 1, or Strong Buy.

Perimeter Solutions shares have rallied 158.6% over the past year, pushing its valuation to 4.84 times trailing book value, above the specialty chemicals sub-industry average of 3.97 times. The company secured a new five-year Defense Logistics Agency suppressants framework worth up to $500 million and a renewed CAL FIRE contract, while first-quarter 2026 revenues jumped 74% to $125.1 million and adjusted EBITDA rose 128% to $41.2 million. However, operational instability at the Sauget, Illinois facility and wildfire-driven volume volatility remain risks. The stock carries a Zacks Rank of 1, or Strong Buy, but its Value and Momentum Style Scores are both F, suggesting caution on entry price after the steep advance.

Medical Manufacturing Technologies, a Perimeter Solutions company, has appointed Grant Bowman as President to lead its next phase of growth. Bowman previously served as Executive Vice President of Specialty Products at Perimeter Solutions, which acquired MMT in January 2026. He succeeds Robbie Atkinson, who stepped down after serving as CEO and President since 2020 and leading a period of significant transformation. Bowman stated his focus is on making MMT the first call for customers solving hard manufacturing problems.