PETMED EXPRESS INC (PETS) - Comprehensive Stock Analysis & Investment Research
Deep dive into PETMED EXPRESS INC's business profile, financial performance, AI predictions, and competitive positioning to make informed investment decisions.
PETMED EXPRESS INC Investment Summary
When evaluating whether PETMED EXPRESS INC (PETS) represents a compelling investment opportunity, investors must consider multiple factors including the company's financial health, market position, growth prospects, and what our AI-powered predictive models suggest about its near-term price trajectory.
Company Profile
PETMED EXPRESS INC (PETS) operates within the Trade & Services sector, specifically in the Retail-Drug Stores and Proprietary Stores industry. The company employs approximately 140 people. With a market capitalization of $72 million, the company is a small-cap stock that may offer higher growth potential but also carries higher volatility.
Financial Performance Analysis
PETMED EXPRESS INC generates annual revenues of approximately $180 million. The company currently reports a negative net margin of -0.9%, which investors should monitor closely.
From a profitability standpoint, the company reports a Return on Equity (ROE) of 14.9%, which is acceptable for its industry. The Return on Assets (ROA) stands at 11.6%, indicating efficient asset utilization. The gross margin of 24.5% suggests a competitive or commodity-driven business model.
Balance Sheet Strength
Examining the balance sheet health, the current ratio of 4.55x indicates excellent short-term liquidity, meaning the company can comfortably cover its near-term obligations.
Cash Flow Generation
PETMED EXPRESS INC generates $17 million in annual free cash flow, providing financial flexibility for dividends, share buybacks, debt reduction, or strategic investments. Operating cash flow stands at $18 million, demonstrating the company's ability to generate cash from its core business operations. Year-over-year operating cash flow has changed by 3.2%, indicating steady improvement.
Valuation Analysis
The P/E ratio of 13.3x suggests the stock may be undervalued relative to its earnings, potentially offering value for investors. However, low P/E ratios can also reflect market concerns about future growth prospects. The price-to-book ratio stands at 0.74x, potentially indicating undervaluation or market concerns about asset quality.
AI-Powered Price Predictions
Our AI models continuously analyze PETMED EXPRESS INC to identify potential price movements. Subscribe to Intratio Premium to unlock detailed AI-powered price predictions for 7, 30, and 90-day horizons.
Investment Considerations
When determining whether PETMED EXPRESS INC is a suitable investment, consider your investment objectives, risk tolerance, and time horizon. As a small-cap stock, PETMED EXPRESS INC may offer higher growth potential but also carries elevated volatility and risk.
This analysis is generated automatically using our proprietary AI systems and should not be considered personalized investment advice. Past performance does not guarantee future results. Always conduct your own research and consider consulting a financial advisor before making investment decisions.
Corporate Identity
PETMED EXPRESS INC (Stock Symbol: PETS) is a prominent company operating within the Trade & Services sector, with a specific focus on the Retail-Drug Stores and Proprietary Stores industry. The company's shares are publicly traded on the Nasdaq exchange.
Leadership & Workforce
The organization employs approximately 140 professionals, which is characteristic of a lean, focused organization that may emphasize efficiency and specialized expertise.
Market Classification
With a market capitalization of $72 million, PETMED EXPRESS INC is classified as a small-cap stock. Small-cap companies often represent emerging businesses with substantial growth potential. While these investments typically carry higher volatility, they can offer significant upside for investors willing to accept greater risk.
Sector & Industry Context
Operating within the Trade & Services sector, PETMED EXPRESS INC is subject to the unique dynamics, opportunities, and challenges that characterize this segment of the economy.
Revenue & Growth Analysis
PETMED EXPRESS INC generates annual revenues of $180 million , representing an emerging company in its growth phase. While smaller in scale, such companies often offer higher growth potential as they capture market share and expand their operations.
Profitability Analysis
The company achieves a -0.9% net profit margin, indicating the company is currently operating at a loss. This could reflect heavy growth investments, restructuring costs, or fundamental business challenges that require careful evaluation.
Gross profit margin stands at 24.5%, a moderate margin common in manufacturing, retail, or distribution-heavy businesses where competition or cost structures limit pricing flexibility.
Operating margin is -0.6%, suggesting high operating expenses relative to revenues, which may reflect growth investments or operational inefficiencies.
Market Valuation
Current market capitalization stands at $72 million . This small-cap classification typically represents higher-growth, higher-risk opportunities. Small-cap stocks can be more volatile but may offer substantial returns if the company successfully executes its growth strategy.
Return on Investment Metrics
Return on Equity (ROE) measures 14.9%, indicating adequate returns for shareholders, roughly in line with broader market averages. This represents acceptable but not exceptional capital efficiency.
Return on Assets (ROA) stands at 11.6%, demonstrating solid efficiency in utilizing company assets to generate earnings.
Return on Invested Capital (ROIC) measures 14.7%, demonstrating the company creates meaningful value by earning returns well above its cost of capital.
Cash Flow Generation
Free cash flow generation of $17 million annually indicates positive cash generation, though at a modest level that may limit flexibility for major investments or returns to shareholders.
Operating cash flow reaches $18 million , with year-over-year growth of 3.2%. Operating cash flow represents the cash generated from core business operations before capital investments, providing insight into the sustainability of the company's business model.
Strategic Market Position
PETMED EXPRESS INC strategically competes in the highly dynamic Retail-Drug Stores and Proprietary Stores marketplace. As a small-cap company, it represents an emerging market participant with potentially significant growth opportunities. Small-caps often offer greater growth potential as they capture market share and scale their operations, though this comes with higher risk and volatility. Success at this stage can lead to substantial returns for early investors who identify winning business models.
Industry Competitive Landscape
PETMED EXPRESS INC competes within the Trade & Services sector, navigating the competitive dynamics and market forces specific to this industry. The company's competitive position depends on its ability to differentiate through product quality, cost efficiency, customer relationships, or other strategic advantages relevant to its specific market segment.
Operational Efficiency
The company shows positive operational efficiency through free cash flow generation of $17 million annually , with year-over-year cash flow growth of 3.2%. Positive free cash flow indicates the business generates more cash than required for operations and capital investments, providing resources for growth initiatives or shareholder returns.
Margin & Pricing Power Analysis
The company maintains a 24.5% gross margin characteristic of commodity-like businesses or high-volume, low-margin operators. Thin gross margins require exceptional operational efficiency and volume to generate meaningful profits. Companies at this margin level are particularly sensitive to cost increases or pricing pressures.
Operating margin of -0.6% demonstrates how efficiently the company converts revenues into operating profits after accounting for all operating expenses including research and development, sales and marketing, and general administrative costs. Operating margin compression relative to gross margin suggests high operating expenses that may warrant efficiency improvements or reflect necessary growth investments.
Asset Utilization Efficiency
Asset turnover ratio of 1.50x indicates exceptional efficiency in utilizing company assets to generate revenue. High asset turnover is characteristic of retail, distribution, or service businesses that operate with relatively lean asset bases. This efficiency translates to higher returns on invested capital when combined with reasonable margins.
Financial Strength & Leverage
Current ratio of 4.55 demonstrates strong short-term liquidity with current assets significantly exceeding current liabilities. This provides a substantial buffer for meeting near-term obligations and handling unexpected financial needs.