$1.52
$20.10
bear $1.52
base $15.64
bull $20.10
margin of safety $7.00
market price* $26.54
Perimeter Solutions makes fire retardants and firefighting foams (its Fire Safety segment, about three quarters of 2025 sales of $653 million) and specialty chemicals, mainly phosphorus pentasulfide used in lubricant additives and agricultural products (Specialty Products). In January 2026 it bought Medical Manufacturing Technologies (MMT), a maker of machinery and consumables for minimally invasive medical devices, for $682 million in cash, funded by $550 million of new 6.25% senior secured notes due 2034 plus cash on hand. About 76% of sales are in the United States, and the U.S. Forest Service (32% of 2025 sales) and Bureau of Land Management (11%) are the dominant customers. In September 2025 the company signed a new five-year agreement with both agencies, which secures the commercial framework through roughly 2030. HOW WE MEASURED EARNINGS. We start from cash generated by operations, remove working-capital swings and stock compensation, and deduct only the maintenance part of capital spending. On that basis the business produced after-interest owner earnings of about -$15 million in 2022, $25 million in 2023, $160 million in 2024 and $202 million in 2025. Because we value the business first and then subtract what it owes, we add back cash interest (about $37 million a year before the MMT deal) to get the cash the business produced before its lenders: roughly $21 million, $62 million, $197 million and $239 million. The step-up is real but recent: Fire Safety sales were about $226 million in both 2022 and 2023, then $436 million in 2024 and $489 million in 2025, on more proactive use of air tankers by agencies, pricing to value, and new business, even though total acres burned fell in 2025. 2022 is set aside as distorted (a $54 million cash payment to the company's founders and a large inventory build). We use only the years since the 2021 combination because earlier periods were a carve-out under a former parent. THE FOUNDERS' ARRANGEMENT AND OTHER CLAIMS. Two items sit ahead of or beside common shareholders. First, an advisory agreement with the company's founders (EverArc) pays them 2.36 million shares' worth each year through 2027 and, through 2031, 18% of any rise in the share price above the highest previous payment price (now about $27.89) on 157 million shares, settled at least half in stock. The 2025 amounts ($469 million: 13.4 million shares plus $95.7 million in cash, paid in February 2026) are already reflected in the latest share count of 163.7 million and in cash. We charge the two remaining fixed annual amounts as about 4.7 million additional shares; we assume no variable payment in our cases because none of our values reaches $27.89 per share by 2031, but note that any market price above that level hands the founders 18% of the excess. The accounting charge for this arrangement ($435 million in 2025) swings with the share price and is not cash, so it is excluded from earnings and dealt with as a claim. Second, there is $119 million of mandatorily redeemable 6.5% preferred stock that must be repaid before common holders. Debt is $1.225 billion: $675 million of 5.0% notes due late 2029 and $550 million of 6.25% notes due 2034, plus small finance leases. We reduce the debt figure by about $11 million because the 2029 notes carry a below-market coupon; the 2034 notes show the company could borrow at 6.25% in January 2026, so we do not assume distressed refinancing costs. Net of about $40 million of cash we regard as surplus, the business owes roughly $1.30 billion (including preferred). BASE CASE ($15.64 per share). Fire Safety and legacy Specialty Products keep producing about $218 million a year before lenders, the middle of the 2024 and 2025 results, with no growth credited and no fade, because the Forest Service qualification process, decades of incumbency and the five-year agreement are structural features already in evidence. MMT contributes about $35 million a year (we haircut the company's own statement of about $140 million of revenue and $50 million of adjusted EBITDA, which is not on our basis, for capital spending, stock pay and taxes) for ten years, then fades to zero over the next ten because nothing in the filings shows how long its installed base and consumables stream persist. Business worth about $3.96 billion; owes about $1.30 billion; leaves about $2.66 billion for shareholders. After 4.7 million founder-fee share equivalents and 4.5 million exercisable options, about $15.64 per share. BEAR CASE ($1.52 per share). Fire activity reverts to the 2022 to 2023 pattern, when Fire Safety sales were $226 million and cash before lenders was $21 million to $62 million, and the government customers, which are 43% of sales, renegotiate when the current agreement ends in 2030. Legacy cash flow averages $130 million a year through 2030, then settles at $62 million. MMT delivers $25 million a year for ten years and fades to zero over the next ten. Business worth about $1.55 billion; owes about $1.30 billion; leaves about $0.26 billion, or $1.52 per share. Cash flow still covers interest of about $68 million a year, but the cushion after 2030 is thin. A leveraged, customer-concentrated business has a very poor tenth percentile. BULL CASE ($20.10 per share). 2025's level of $239 million is simply repeated forever, the agreement renews on terms already visible, and MMT produces $45 million a year permanently (if its purchase-related tax deductions are realized). Business worth about $4.73 billion; owes about $1.30 billion; leaves about $3.43 billion, or about $20.10 per share. GROWTH LEFT OUT. We credit no growth. Rising Fire Safety sales, the 2025 tuck-in acquisitions ($62 million spent) and MMT's stated record of acquisitive growth have run for only one or two years, have not been tested through a downturn, or rest on management statements; the long-run rise in acres burned is a market trend rather than something the company has locked in. Recent trading (first-half 2026 sales up 44% including MMT, and cash used in operations of $90 million because of the founders' payment, deal costs and seasonal working capital) was used to check that the earnings level still holds, not to lift it. WHAT WOULD MAKE THIS WRONG. On the upside: a much higher sustained Fire Safety level, and cash tax savings from deducting the founders' payments (deferred taxes fell $74 million in 2025 but we could not reconcile how much has already been realized, so we credit none). On the downside: a mild fire season, agency budget or contract changes, restrictions on PFAS-type foams, ongoing plant downtime at the Sauget, Illinois toll facility that serves phosphorus pentasulfide customers, and the fact that MMT's stand-alone financials are not available in the filings we could review, so its earning power rests partly on company statements.