PETS  Petmed Express Inc.

Exchange

NASDAQ

Sector

Health Care

Industry

Medical/Nursing Services

Market Cap.

405.67M

Vuru Grade

69.51/100

Current Price

$20.03
-0.10 (-0.50%)

Growth Price

$4.41
Overvalued by 78.01%

Stability Price

$13.10
Overvalued by 34.61%

Company Metrics

  • P/E 18.72
  • P/S 1.69
  • P/B 4.56
  • EPS 1.07
  • Cash ROIC 57.83%
  • Cash Ratio 5.31
  • Dividend 0.76 / 3.79%
  • Avg. Vol. 199,677.00
  • Shares 20.25M
  • Market Cap. 405.67M

Company Description

PetMed Express, Inc., doing business as 1-800-PetMeds, markets non-prescription and prescription pet medications; and other health products for dogs, cats, and horses. The company's non-prescription medications include flea and tick control products, bone and joint care products, vitamins and nutritional supplements, and hygiene products. Its prescription medications comprise heartworm preventativ... more


Download 10 Years of Financial Statements:
Income Statement   Balance Sheet   Cash Flow

News

PetMed Express: A Surprising Dividend Stock
Seeking Alpha - Mar 22, 2017
PetMed Express (NASDAQ:PETS), better known by its brand 1800Petmeds, is a surprisingly good dividend stock. Throughout the article I will refer to the company as Petmeds. I believe that people will continue to spend more and more on their pets. I ...
Two Sigma Investments LP Decreases Stake in Petmed Express Inc (PETS) - The Cerbat Gem
Latest Stocks: The Petmed Express Inc (PETS) Lowered to “Sell” at Zacks ... - Petro Global News 24
Petmed Express Inc (PETS) Upgraded by Zacks Investment Research to Hold
Chaffey Breeze - 2 hours ago
Zacks Investment Research upgraded shares of Petmed Express Inc (NASDAQ:PETS) from a sell rating to a hold rating in a research note issued to investors on Tuesday.
Intraday Movers: PetMed Express, Inc. (NASDAQ:PETS) , Identiv, Inc. (NASDAQ:INVE) - NYSE Journal (press release)
PetMed Express' New Order Sales Disappoint, Competition Rife
Yahoo Finance - Mar 24, 2017
On Mar 23, we issued an updated research report on Pompano Beach, FL-based PetMed Express, Inc. PETS. The company operating as 1-800-PetMeds, is a leading nationwide pet pharmacy.
The Petmed Express Inc (PETS) Cut to “Sell” at Zacks Investment Research - Petro Global News 24
Public Sector Pension Investment Board Holds Position in Petmed Express Inc (PETS) - Chaffey Breeze
AmsterDog Rescue, Supported by PetMed Express, Inc., Rings the NASDAQ Opening ...
Benzinga - Mar 23, 2017
America's Largest Pet Pharmacy®, PetMed Express, Inc.® (NASDAQ: PETS) is sponsoring AmsterDog Rescue to help them in their commitment to finding loving homes for deserving pets.
PetMed Express: Q3 Seems To Support The Bear Case
Seeking Alpha - Jan 25, 2017
PetMed Express has cut marketing spend and put the funds into discounting, which has helped both revenue and margins in the past few quarters.
PetMed Express Inc. PETS (US: Nasdaq)
Wall Street Journal - Feb 12, 2011
PetMed Express Inc. PETS (U.S.: Nasdaq). search. View All companies. AT CLOSE 4:00 PM EDT 03/27/17. $20.13 USD; 0.06 0.30%.
PetMed Express: Competitive Advantage And Growth Prospects
Seeking Alpha - Nov 24, 2014
PetMed Express (NASDAQ:PETS) is an online pet medicine retailer providing over-the-counter and prescription medicine to pet owners.
PetMed Express Inc.
MarketWatch - Aug 22, 2009
PetMed Express Inc. NASDAQ: PETS. GO. Set Alerts · Find a Broker · Join TD Ameritrade · Market Index · Overview Profile News Charts Financials Historical Quotes Analyst Estimates Options SEC Filings Insiders.
Watch out PetSmart, Inc.: PetMed Express, Inc. Is The Best Way To Cash In On ...
Motley Fool - May 13, 2014
Pet pharmacy PetMeds Express (NASDAQ:PETS) could very well be a diamond in the rough. With a market capitalization of just $250 million, PetMeds very likely flies under your radar. However, it would be a mistake to overlook it just because of its small ...
PetMed Express Inc. (PETS) Moves Lower on Volume Spike for March 06
Equities.com - Mar 6, 2017
PetMed Express Inc. (PETS) traded on unusually high volume on Mar. 06, as the stock lost 3.66% to close at $20.02. On the day, PetMed Express Inc. saw 564,136 shares trade hands on 4,892 trades. Considering that the stock averages only a daily volume ...
Growth Rate Assumed by Market

We did a reverse valuation to calculate the growth rate the market is assuming for PETS to be considered fairly valued at its current market price. It's useful to compare this to the growth rate we're assuming for the Growth Price.

Future Free Cash Flow Growth Rate

This is the annual growth rate we've applied to calculate PETS's Free Cash Flow for the next 10 years. To calculate it, we looked at several time periods of the last 10 years. Feel free to adjust it, but we limit the initial growth rate to 20% and slow it down over the years. Otherwise, long-term sustainability issues come into play.

Discount Rate

The discount rate is the annual rate of return an investor requires to take the risk of investing in a single stock. To account for that risk, this should be above 8-10%, as this is the avg. annual rate of return for the S&P500 over the past 100 years.

$20.03 Current Price

$4.41 Growth Price (DCF)

Overvalued by 78.01%


Growth Rate Assumed by Market: 97.96%


Future Free Cash Flow Growth Rate: 0.4%


Discount Rate: 15.0%


Show Free Cash Flow numbers

$13.10 Stability Price (EPV)

Overvalued by 34.61%


Discount Rate: 15.0%

$2.99 NCA Price

Overvalued by 85.08%

$17.49 Book Price

Overvalued by 12.70%


Varying Cash Return on Invested Capital over the past 5 years

PETS has efficiently invested its financial resources in buildings, projects, and equipment, resulting in strong returns. However, there is a substantial variation in their Cash ROIC from year-to-year. This company may have unreliable free cash flow or operates in a business where invested capital costs increase substantially on a sporadic basis. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

PETS has created $57.83 of cash for every $100 invested.
Figures in USD. Fiscal year ends in March
20122013201420152016
Free Cash Flow 19.69M 12.66M 13.46M 31.13M 923,000.00
divided by
Invested Capital 24.53M 30.54M 36.44M 24.23M 45.56M
Cash ROIC 80.27% 41.47% 36.94% 128.45% 2.03%

Excellent Return on Equity over the past 5 years

Over the past 5 years, PETS has generated strong profits with money shareholders have invested. This is considered one of the best indicators of quality management. Beware of extremely high Return on Equity (> 50%) as this is often unsustainable.

PETS has generated $24.16 of Earnings for every $100 of Shareholders' Equity.
Figures in USD. Fiscal year ends in March
20122013201420152016
Net Income 16.66M 17.17M 17.97M 17.45M 20.57M
divided by
Stockholders' Equity 81.18M 64.01M 70.22M 75.44M 83.20M
Return on Equity 20.52% 26.81% 25.59% 23.14% 24.72%

Excellent Business Performance over the past 10 years

PETS has been able to maintain profitability in good times and bad. This could mean PETS has an extremely strong business or has the ability to scale down costs when needed. This should be a fairly resilient business, but double check for future sustainability by looking at its Risk Factors in the Annual Report.

PETS has created positive free cash flow for 9 or more of the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Free Cash Flow 15.54M 18.88M 11.76M 26.64M 29.44M 19.69M 12.66M 13.46M 31.13M 923,000.00

Very Strong Balance Sheet

PETS has more Cash than its Total Liabilities, resulting in $1.51 Net Cash per share. In other words, if you buy PETS today, the price you're paying for shares is actually $18.52 because $1.51 of Cash is included in the current share price. This much Cash is very healthy. It can help PETS sustain itself in the face of any economic turmoil and makes a stock buyback more of a possibility.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Cash 39.44M 25.05M 30.13M 53.14M 59.78M 57.15M 33.65M 33.84M 51.20M 37.64M
Current Assets 57.97M 45.22M 61.63M 86.50M 89.60M 87.61M 70.19M 74.21M 80.40M 67.63M
Total Assets 61.22M 73.45M 81.96M 104.17M 106.29M 91.06M 73.18M 78.38M 82.85M 90.28M
Current Liabilities 7.35M 6.42M 6.99M 7.09M 8.96M 9.39M 9.00M 8.09M 7.42M 7.08M
Total Liabilities 7.35M 6.42M 6.99M 7.31M 9.28M 9.88M 9.17M 8.16M 7.42M 7.08M
Stockholder' Equity 53.86M 67.03M 74.97M 96.86M 97.01M 81.18M 64.01M 70.22M 75.44M 83.20M
Current Ratio 7.88 7.04 8.81 12.20 10.00 9.33 7.80 9.17 10.84 9.55
TL-to-TA 0.12 0.09 0.09 0.07 0.09 0.11 0.13 0.10 0.09 0.08

Consistent Reinvestment of Profits over the past 10 years

PETS has consistently retained profits. This may put PETS in a strong position to invest for the future, by buying new machinery, investing in R&D or a number of other options. By effectively using these earnings, PETS can greatly improve their long-term economic picture.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Retained Earnings 38.62M 58.64M 75.16M 94.31M 97.12M 81.11M 63.99M 68.65M 72.34M 78.30M
Retained Earnings Growth - 51.85% 28.17% 25.48% 2.98% -16.48% -21.11% 7.28% 5.38% 8.23%

Competitive Industry over the past 10 years

PETS is likely operating in an industry with medium to low barriers to entry. This may mean that PETS doesn't have a characteristic that's hard to replicate, such as exclusive distribution, branding or the ability to keep costs low. If Gross Margins are at least satisfactory, it's likely that PETS invests heavily in R&D and Sales, General & Administrative expenses.

Only $8.85 of every $100 of Revenue have been profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Net Income 14.44M 20.02M 22.98M 26.00M 20.87M 16.66M 17.17M 17.97M 17.45M 20.57M
divided by
Revenue 162.25M 188.34M 219.41M 238.27M 231.64M 238.25M 227.83M 233.39M 229.40M 234.68M
Net Profit Margin 8.90% 10.63% 10.47% 10.91% 9.01% 6.99% 7.53% 7.70% 7.61% 8.76%

Varying Pricing Power over the past 10 years

PETS has maintained substantial gross margins, suggesting that they have been able to set prices without consideration of the cost of goods sold. However, there is a substantial variation in their Gross Profit Margins from year-to-year, which indicates inconsistent performance. Look at reasons for this inconsistency to determine the likelihood of future sustainability.

$42.58 of every $100 worth of sales have been Gross Profit, on average over the past 10 years.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Gross Profit 64.57M 74.21M 85.33M 91.86M 83.96M 238.25M 77.12M 77.62M 76.27M 76.30M
divided by
Revenue 162.25M 188.34M 219.41M 238.27M 231.64M 238.25M 227.83M 233.39M 229.40M 234.68M
Gross Margin 39.80% 39.41% 38.89% 38.55% 36.24% 100.00% 33.85% 33.26% 33.25% 32.51%

Low Capital Intensity over the past 10 years

PETS has consistently used a small portion of their Net Income buying new equipment or investing in new facilities. This indicates that PETS may require minimal investment to stay competitive. This leaves them with extra money to spend on growing their business and potentially buying back stock.

14.21% of Profits are being spent on Capital Expenditures, like Property, Plant, & Equipment, required to run the business.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Capital Expenditure 1.03M 502,706.00 3.21M 1.05M 667,000.00 705,000.00 626,000.00 45,000.00 918,000.00 20.13M
divided by
Net Income 14.44M 20.02M 22.98M 26.00M 20.87M 16.66M 17.17M 17.97M 17.45M 20.57M
Capital Expenditure Ratio 7.10% 2.51% 13.96% 4.03% 3.20% 4.23% 3.65% 0.25% 5.26% 97.88%

Strong Dividend History over the past 10 years

PETS has consistently distributed a dividend for the past 7 years. This suggests PETS is established and will likely continue to distribute its dividend for the foreseeable future.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Dividend Paid - - - 6.81M 10.73M 10.96M 31.97M 13.33M 13.81M 14.68M
divided by
Shares Outstanding 24.27M 24.30M 23.48M 22.75M 22.64M 20.71M 20.05M 20.04M 20.14M 20.25M
Dividend Paid Per Share - - - 0.30 0.47 0.53 1.59 0.66 0.69 0.72
Price at Year End 11.20 16.42 16.45 17.28 10.25 10.85 16.48 14.50 17.69 23.07
Dividend Yield - - - 1.73% 4.62% 4.88% 9.68% 4.59% 3.88% 3.14%

Strong History of Stock Buybacks over the past 10 years

PETS has a strong history of delivering increased value for shareholders in the form of stock buybacks. These have helped improve financial metrics and increase each shareholders' relative ownership stake in the company, due to fewer shares outstanding and holding the same number of shares.
Figures in USD. Fiscal year ends in March
2007200820092010201120122013201420152016
Shares Outstanding 24.27M 24.30M 23.48M 22.75M 22.64M 20.71M 20.05M 20.04M 20.14M 20.25M
Stock Bought Back - -0.12% 3.48% 3.24% 0.45% 9.34% 3.29% 0.03% -0.46% -0.58%
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Discussion
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4
Posted by Alexleroi  (on December 12, 2012)
And again, Advertising expenses are not immediately classified as expenses.
1
Posted by Alexleroi  (on December 12, 2012)
Bold accounting practices: inaccessible ARS funds not treated as loss but classified as long-term assets.
4
Posted by Honeybadger  (on December 14, 2012)
Good catch on both counts! It's right there in black and white on pages 31 and 32 of the 2011 annual report. I love the logic of the advertising expenses not being expensed until the advertisement is aired each time. The money is already spent. It should be expensed! Reference the Auction Rate Securities, they have 12.5 million worth or the rough equivalent of half the average yearly net income. 3 years after the credit crisis and they still can't move them? They are probably worthy of a substantial writedown/impairment charge. Of course, the Wall Street dog and pony show would not like the effect that would have on earnings.