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Petmed Express (PETS)
NASDAQ:PETS
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Petmed Express
(NASDAQ:PETS)58Neutral
Positive Factors
Financial Stability
The business is well-capitalized to make it through the turnaround, with $50M of cash and no debt.
Profitability
Gross margins for the quarter reached 29.1%, ahead of the 27.4% estimate, due to limited promotions and a focus on profitability.
Negative Factors
Revenue Decline
Q2 revenue declined 16% to $59.6M, which was below the $66.0M estimate, indicating customers reduced spending or sought promotions from competitors.
Petmed Express (PETS) vs. S&P 500 (SPY)
Market Cap
$81.59M
Dividend YieldN/A
Average Volume (3M)305.05K
Price to Earnings (P/E)373.8
Beta (1Y)0.87
Revenue Growth-10.82%
EPS GrowthN/A
CountryUS
Employees287
SectorHealthcare
Sector Strength74
IndustryHealthcare Providers & Services
Share Statistics
EPS (TTM)0.01
Shares Outstanding20,656,458
10 Day Avg. Volume245,377
30 Day Avg. Volume305,045
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.33
Price to Cash Flow (P/CF)-17.50
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.00Price Target Upside0.00%
Rating ConsensusHold
Number of Analyst Covering1
Petmed Express Business Overview & Revenue Model
Company DescriptionPetMed Express, Inc. engages in the provision of markets prescription and non-prescription pet medications, health products and supplies for dogs and cats. Its non-prescription medications include flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and supplies. The prescription medications include heartworm preventatives, arthritis, thyroid, diabetes and pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The firm markets its products through national television, online and direct mail or print advertising campaigns. The company was founded in January 1996 and is headquartered in Delray Beach, FL.
How the Company Makes MoneyPetmed Express makes money by selling pet medications and health-related products through its online platform and call center. The company's revenue model is primarily based on the retail sale of prescription and non-prescription medications, where customers purchase products directly from Petmed Express. Key revenue streams include sales of prescription medications, which require a prescription from a vet, and non-prescription products such as flea and tick control, nutritional supplements, and hygiene products. Petmed Express benefits from its direct-to-consumer model, which eliminates the need for physical retail locations and allows for competitive pricing. Additionally, the company has established partnerships with veterinary suppliers and manufacturers to source a comprehensive range of pet health products. Factors contributing to its earnings include a broad customer base, repeat purchases from pet owners, and the growing trend of pet humanization which drives demand for high-quality pet healthcare products.
Petmed Express Financial Statement Overview
Summary
Petmed Express shows strong balance sheet stability with a low debt-to-equity ratio and solid cash reserves. However, weak profitability and inconsistent cash flow performance are concerns. Positive operational improvements in EBIT and EBITDA margins are noted, but overall financial performance needs enhancement in revenue growth and free cash flow optimization.Income Statement
The income statement reflects a challenging period for Petmed Express. While there is a positive gross profit margin of 26.22% in TTM, the net profit margin is low at 0.14%, indicating tight profitability. Revenue growth has been inconsistent, with a decline in revenue from 2023 to 2024. EBIT and EBITDA margins have improved from negative values in 2023 to positive in TTM, suggesting some operational improvements but overall financial performance remains weak.55
Neutral
Balance Sheet
Petmed Express maintains a solid balance sheet with a low debt-to-equity ratio of 0.01, indicating strong financial stability. The equity ratio of 66.43% is robust, reflecting a healthy capital structure. Return on equity is modest at 0.37%, impacted by low profitability. Cash reserves are strong, providing a cushion against potential financial volatility.72
Positive
Cash Flow
The cash flow statement shows mixed performance. The operating cash flow to net income ratio is strong at 13.54, indicating effective cash generation relative to net income. However, free cash flow growth is volatile, and the free cash flow to net income ratio is low at 2.40, reflecting limited free cash flow relative to earnings. While cash flow from operations is stable, improvements in free cash flow are necessary.68
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 247.01M | 281.06M | 256.86M | 273.42M | 309.21M | 284.13M | Gross Profit |
| 64.75M | 78.65M | 71.01M | 78.08M | 89.95M | 81.25M | EBIT |
| 555.00K | -8.16M | -1.43M | 25.71M | 37.59M | 30.98M | EBITDA |
| 7.87M | -1.11M | 2.12M | 28.45M | 40.01M | 33.23M | Net Income Common Stockholders |
| 357.00K | -7.46M | 233.00K | 18.72M | 23.92M | 25.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 50.10M | 55.30M | 104.09M | 111.08M | 118.72M | 103.76M | Total Assets |
| 144.79M | 169.88M | 164.12M | 176.32M | 187.50M | 155.32M | Total Debt |
| 1.10M | 1.45M | 0.00 | 0.00 | 0.00 | 0.00 | Net Debt |
| -49.00M | -53.84M | -104.09M | -111.08M | -118.72M | -103.76M | Total Liabilities |
| 48.61M | 73.15M | 40.32M | 34.13M | 46.22M | 25.31M | Stockholders Equity |
| 96.18M | 96.73M | 123.80M | 142.19M | 141.28M | 130.01M |
| Cash Flow | Free Cash Flow | ||||
| 856.00K | -194.00K | 22.54M | 16.75M | 37.64M | 36.53M | Operating Cash Flow |
| 4.83M | 4.32M | 27.80M | 18.50M | 40.08M | 38.84M | Investing Cash Flow |
| -3.98M | -40.67M | -10.26M | -1.75M | -2.43M | -2.31M | Financing Cash Flow |
| -194.00K | -12.44M | -24.54M | -24.38M | -22.69M | -33.30M |
Petmed Express Technical Analysis
Negative
4.00
Price Trends
4.78
Negative
4.75
Negative
4.26
Negative
Market Momentum
-0.21
Positive
37.06
Neutral
10.49
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PETS, the sentiment is Negative. The current price of 4 is below the 20-day moving average (MA) of 4.54, below the 50-day MA of 4.78, and below the 200-day MA of 4.26, indicating a bearish trend. The MACD of -0.21 indicates Positive momentum. The RSI at 37.06 is Neutral, neither overbought nor oversold. The STOCH value of 10.49 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PETS.
Petmed Express Risk Analysis
Petmed Express disclosed 33 risk factors in its most recent earnings report. Petmed Express reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Petmed Express Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $76.08B | 31.09 | 50.91% | 1.06% | 8.33% | 7.70% | |
76 Outperform | $35.92B | 41.40 | 55.65% | ― | 6.46% | 5.82% | |
59 Neutral | $1.41B | ― | -2.98% | ― | 15.97% | 78.77% | |
58 Neutral | $81.59M | 373.83 | 0.36% | ― | -10.82% | ― | |
49 Neutral | $7.05B | 0.34 | -55.09% | 2.46% | 25.27% | -3.43% |
* Healthcare Sector Average
Performance Comparison
PETS
Petmed Express
4.00
-0.97
-19.52%
IDXX
Idexx Laboratories
437.23
-120.23
-21.57%
ZTS
Zoetis
167.00
-14.59
-8.03%
TRUP
Trupanion
33.88
6.02
21.61%
Petmed Express Earnings Call Summary
Earnings Call Date: Feb 10, 2025 | % Change Since: -24.10% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with significant progress in profitability and cost-cutting measures, alongside challenges in sales and competitive pressures. The company is making strategic investments to modernize its technology and improve customer experience, aiming for long-term growth.Highlights
Return to Profitability
The company achieved $2 million in adjusted EBITDA, representing a $1.1 million improvement year-over-year, with a reduction of G&A expenses by $2.6 million.
Cost Cutting Achievements
Implemented cost-cutting measures and consolidation strategies targeting $5 million in annualized savings, on track to meet this milestone.
Inventory Efficiency Improvement
Inventory efficiency improved with inventory turn rising to 1.5 in Q3, alongside a 66% reduction in total inventory on hand.
Technological Advancements
Website and mobile enhancements, including a full website refresh and the relaunch of iOS and Android mobile apps, were implemented to modernize the tech stack.
Lowlights
Decline in Net Sales
Net sales were $53 million, a 19% decline from $65.3 million in the same period last year, primarily driven by a 34% reduction in gross advertising.
Competitive Holiday Environment
The company faced a highly competitive and promotional holiday environment, leading to a strategic decision to prioritize margin protection over aggressive promotions, resulting in lower sales and new customer acquisition.
Challenges in Customer Conversion
Lower conversion rates were noted despite increased channel visits, with ongoing efforts to address these challenges through search functionality improvements and visible promotions.
Company Guidance
During the PetMed Express fiscal third quarter 2025 earnings call, CEO Sandra Campos outlined key strategic initiatives aimed at repositioning the company for long-term success. The company reported achieving $2 million in adjusted EBITDA, marking a $1.1 million improvement year-over-year, alongside a reduction in general and administrative expenses by $2.6 million compared to the previous year. Despite a 19% decline in net sales to $53 million, largely due to a 34% reduction in gross advertising spend, the company focused on profitability by implementing cost-cutting measures, including a $5 million target in annualized savings from integrating PetCareRx operations. PetMed also highlighted digital enhancements, such as a full website refresh and app relaunch, which contributed to an increase in gross new customers to 84,000. Additionally, the average order value saw a 7% increase to $108. Inventory efficiency improved significantly, with inventory turn rising to 1.5 and a 66% reduction in total inventory on hand. While navigating a competitive market environment, PetMed emphasized its commitment to financial efficiency, customer experience enhancement, and capturing market share in the companion animal health sector.Petmed Express Corporate Events
Business Operations and Strategy
PetMed Express Implements Shareholder Rights Protection Plan
Neutral
Dec 3, 2024
PetMed Express, Inc. has introduced a limited duration shareholder rights plan aimed at protecting shareholder investments by preventing any entity from gaining control of the company without paying a premium. This plan, effective December 16, 2024, issues rights for each share of common stock and becomes exercisable if someone acquires 12.5% or more of the stock without board approval. The rights allow shareholders to purchase stock at a discount, ensuring the board can make decisions benefiting all shareholders without hindering approved mergers or sales.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.