Perimeter Solutions, Inc. (PRM): A Bull Case Theory

We came across a bullish thesis on Perimeter Solutions, Inc. on Speedwell Memos’s Substack by Speedwell Research. In this article, we will summarize the bulls’ thesis on PRM. Perimeter Solutions, Inc.'s share was trading at $27.49 as of December 2nd. PRM’s trailing and forward P/E were 50.89 and 19.57 respectively according to Yahoo Finance.

Perimeter Solutions (PRM) reported strong 3Q25 results, with shares surging +26% and up +112% YTD, though the magnitude of the move appeared disproportionate to fundamentals. Net sales grew +9% y/y to $315 mn, driven by a +9% rise in Fire Safety and +15% growth in Specialty Products. The Fire Safety segment benefited from a more normalized fire season and the U.S. Forest Service’s new directive to combat smaller wildfires early, increasing demand for retardants. The recently announced five-year agreement with the USDA further reinforces Perimeter’s position as a key partner in wildfire management.

The suppressants business added $12.4 mn in revenue y/y, supported by higher volumes, productivity gains, and value-based pricing, with growing recurring revenue from product replacements across its expanding installation base. Conversely, the Specialty Products segment remained weighed down by operational issues at a Flexsys-operated P2S5 plant, where unplanned downtime and alleged safety failures continue amid ongoing litigation as Perimeter seeks to take control of the facility.

However, the IMS business offset this weakness, contributing $10.8 mn in revenue and marking an important step into a new vertical with higher growth and capital allocation potential than the legacy P2S5 business. Overall, adjusted EBITDA reached $329 mn, a 52% margin—over 10 points higher than five years ago—reflecting operational discipline and strategic investments. While the quarter’s results were solid, commentary on the call hinted at potential structural improvements that could enhance business quality over time, supporting optimism around the company’s long-term positioning.

Previously we covered a bullish thesis on Perimeter Solutions (PRM) by Aaron Edelheit in October 2024, which highlighted the company’s pricing power, dominant position in fire retardants, and growth potential in fire prevention. The company’s stock has appreciated approximately 110.65% since our coverage as the thesis played out. The thesis still stands as Speedwell Research shares a similar view but emphasizes operational execution and margin expansion.

Perimeter Solutions, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held PRM at the end of the second quarter which was 37 in the previous quarter. While we acknowledge the potential of PRM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.