Why Shares of Perimeter Solutions Are Red-Hot Today
Key Points
Perimeter reported year-over-year growth in revenue and adjusted EBITDA.
The company has grown free cash flow in 2025 compared to 2024.
Perimeter isn't a value stock, but it may attract conservative investors.
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While investor interest in fire safety specialist Perimeter Solutions (NYSE: PRM) has been relatively cool this October, the company's reporting of strong third-quarter 2025 financial results this morning has the market warming up to the stock.
As of 11:03 a.m. ET, shares of Perimeter Solutions are up 26.9%.
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Perimeter posted growth on more than just the top line
Driven by a 15% year-over-year gain in revenue from its specialty products segment, Perimeter reported Q3 2025 revenue of $315.4 million -- a 9% increase compared to the same period last year.
With respect to profitability, Perimeter also provided investors with something to celebrate. Expanding its earnings before interest, taxes, depreciation, and amortization (EBITDA) margin to 59% from 56% in Q3 2024, Perimeter grew adjusted EBITDA to $186.3 million in Q3 2025 from $170.4 million during the same quarter in 2024.
And it wasn't only the income statement where Perimeter recognized growth. Through the first three quarters of 2025, Perimeter has generated free cash flow of $197 million, a 6.5% increase over the $185 million that it generated in free cash flow during the same period in 2024.
Will investors get burned if they pick up Perimeter stock now?
Trading at 39.5 times trailing earnings, Perimeter stock certainly doesn't represent a bargain-bin opportunity. For conservative investors, however, who are looking to fortify their portfolios with a resilient stock that doesn't represent a high-risk investment, Perimeter is an industrials stock that's worthy of further investigation.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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