Back to top

Analyst Blog

On Mar 22, we retained our Outperform recommendation on PetMed Express (PETS - Analyst Report). Our retention is based on the company’s solid fourth-quarter results,  all-out effort to expand product portfolio as well as to revive the recent drop in new order and re-order sales, in spite of several recent headwinds like the unavailability of the Novartis (NVS - Analyst Report) brands leading to a decline in average order value and a change in product mix to lower-margin items. This nationwide pet pharmacy presently carries a Zacks Rank #1 (Buy).

Why the Reiteration?

PetMed reported a decline in year-over-year revenues during the last reported quarter due to the unavailability of Novartis brands, consumer purchase in smaller quantities, a decline in average order value because of additional discounts amid tough competition and a change in product mix to lower-priced items, mainly generics.

However, we are encouraged to note that the company is working on these issues. PetMed is asking veterinarians to prescribe additional brands, which has led almost 60% pet owners to shift from the Novartis brands. In the last reported quarter, the company added 131,000 new customers compared with 150,000 in the year-ago period.

The company is also working on improving the effectiveness of its campaigns. It has been quite successful in pushing its sales via the Internet. Approximately 78% of the company’s orders were generated on the website compared with 77% in the corresponding year-ago quarter. Moreover, after several quarters of drag in margins, the improvement came as another encouragement during the quarter.

Other Stocks to Consider

Other medical device stocks worth a look are Cyberonics Inc. (CYBX - Analyst Report) and Cytokinetics Incorporated (CYTK - Snapshot Report). All these stocks carry a Zacks Rank #1 (Strong Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
ERBA DIAGNO… ERB 3.00 +3.09%
SANCHEZ ENE… SN 34.18 +2.67%
THE PANTRY… PTRY 21.02 +2.09%
INTEL CP INTC 35.15 +1.88%
CLAYTON WIL… CWEI 117.30 +1.78%