Petmed Express, Inc.

Petmed Express, Inc. (PETS - Analyst Report) shares are trading down from their 2008 high, but still remain safely in the green for the year. The company has beaten analyst estimates in each of the last four quarters, and is set to report its second-quarter results in 2 weeks on October 27.

Company Description

PetMed Express, Inc. sells prescription and non-prescription pet medications and health products for dogs, horses and cats. The company was founded in 1996, has a market cap of $335 million and is headquartered Pompano Beach, Florida.

First-Quarter Results

PetMed stepped up and reported impressive first-quarter results on July 21, showcasing the company's ability to drive earnings growth in a challenging environment. Sales were up 16% from last year to $68.4 million. Income increased to $6.6 million from $6.2 million last year. This produced earnings of 28 cents per share, ahead of analyst estimates by one penny.

Consistent Earnings

This is the fourth time in the last four quarters that Petmed has surprised and beaten analyst estimates, having done so by an average of 2 cents, or 14%.

Analyst Estimates

Analyst estimates are up slightly, a positive signal in this market, with the current-year estimate increasing to 90 cents per share from 88 cents 2 months ago. The next-year estimate is bullish, projecting earnings growth of 14%.

Based upon the current-year estimate, this stock is trading with a forward P/E multiple of 15.5X, a premium to the overall market.

Petmed stacks up very favorable to its industry competition, posting an ROE of 30% compared to -31% industry average. The company's has no debt, compared to an industry debt-to-equity multiple of 8X.

The Chart

Shares of PETS have performed admirably in 2008, recently topping off above $15 after starting the year right around the $11 mark. Moving forward, this company will need to produce strong earnings to support its higher P/E multiple. Take a look at the chart.

Read the full analyst report on PETS