# PSMT Stock: The ’Costco of Latin America’ Keeps Compounding — But Is It Too Expensive?

Page: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/psmt-stock-the-costco-of-latin-america-keeps-compounding-but-is-it-too-expensive
Text version: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/psmt-stock-the-costco-of-latin-america-keeps-compounding-but-is-it-too-expensive.md
Podcast: [Charged Alpha Stock Encyclopedia](https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792)
Published: 2026-07-09T02:16:30+00:00
Episode link: https://chargedalpha.podbean.com/e/psmt-stock-the-costco-of-latin-america-keeps-compounding-%e2%80%94-but-is-it-too-expensive/
Audio file: https://mcdn.podbean.com/mf/web/mizbibpyo8f19tw1/audio_3.mp3
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JSON: https://stenobird.com/v1/public/podcasts/charged-alpha-stock-encyclopedia-7819792/episodes/psmt-stock-the-costco-of-latin-america-keeps-compounding-but-is-it-too-expensive
Duration seconds: 704

## Resource

PriceSmart (PSMT) Q3 FY2026 — PriceSmart grew Q3 revenue 12.5% to ~$1.48B with comparable sales up 10.7%, but adjusted EPS of $1.28 landed just short of the ~$1.32 estimate and the stock — near an all-time high at ~37x earnings — dipped slightly. PriceSmart is the 'Costco of Latin America' — 57 membership warehouse clubs across 12 countries, a sticky membership annuity, a net-cash balance sheet, and a long unit-growth runway (now entering Chile). It's a genuinely wonderful business. But near an all-time high at ~37x earnings, our DCF lands around $150 vs the ~$189 price — so this is a great-business-at-a-rich-price HOLD. THE CALL: HOLD (3/5, GREAT BUSINESS, RICH PRICE) — base-case value ~$150 vs ~$189 today. KEY METRICS: - Q3 FY26: total revenue $1,481.8M (+12.5%); net merchandise sales +12.5% (+8.5% constant currency) - Comparable merchandise sales +10.7% (+6.9% constant currency) — FX was a tailwind of ~3.8 pts - Net income $39.7M (+12.9%); GAAP diluted EPS $1.28 — a slight miss vs ~$1.32 consensus (revenue beat) - Operating income $65.6M (+16.7%); adjusted EBITDA $90.4M; membership income $25.7M (+17.6%) - 57 warehouse clubs in 12 countries; first-ever Chile club announced (spring 2027); pipeline to 63 clubs - Balance sheet: $200M+ cash + investments vs ~$183M debt (net cash); dividend yield <1%; self-funds growth - Valuation ~$189, ~37x earnings, near all-time highs (52-wk high ~$200); cheaper than Costco (~50x) - Owner-earnings DCF (base ~$165M, +4%/+6%, 8-10%): ~$150 fair value vs ~$189 price — a ~20% premium - Risks: emerging-market currency swings (double-edged), thin retail margins, a premium multiple near highs What to watch: constant-currency comparable sales (the real growth gauge), the pace of new club openings (including Chile), and the Latin American…

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