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Patterson Companies Grapples With Multiple Issues: Dump Now?
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On Jun 2, we issued an updated research report on St. Paul, MN–based The Patterson Companies (PDCO - Free Report) , a leading distributor in the dental, companion-pet veterinarian and rehabilitation supply markets. The company currently carries a Zacks Rank #4 (Sell).
Patterson Companies’ unimpressive performance at the dental segment is a key concern. In fact, the 8.3% deterioration on a year-over-year basis in the last reported quarter dented overall results.
Coming to dental equipment, sales declined 17% in the last quarter, primarily due to lower sales of Sirona products and a tough comparison with regard to the year-ago quarter.
Meanwhile, Patterson Companies’ stock looks a little expensive at the moment. A comparative analysis of the company’s forward P/E (TTM basis) multiple reflects a relatively gloomy picture that might be a concern for investors. The multiple currently stands at 20.14, a bit stretched when compared to its own range over the last one year (median of 18.32).
Cutthroat competitive in the U.S. dental products distribution industry is also a major dampener. Notably, Patterson Companies faces serious competition from at least 15 full-service distributors (that include Henry Schein Dental, a unit of Henry Schein) and hundreds of small and local distributors.
The company is also expected to face challenges from the disruption caused by its sales force realignment initiative. High operating expenses have also been a major drag on margins.
Unfavorable Estimate Revision
Owing to the above-mentioned factors, the Zacks Consensus Estimate for full-year 2017 earnings dropped almost 3% to $2.33 per share, as seven out of eight analysts revised their estimates downward over the last 60 days.
For the current quarter, four analysts moved south compared to no movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for the current quarter fell 6.7% to 45 cents over the same time frame.
Dismal Share Price Trend
Patterson Companies has had a disappointing run on the bourse over the past three months. The company returned almost 4.7%, lower than the Zacks categorized Medical/Dental Supplies sub-industry’s gain of almost 6.3%. However, the current level is slightly higher than the S&P 500’s return of 2.8% over the same time period.
Stocks to Consider
Better-ranked stocks in the broader medical sector include Luminex Corporation , Inogen Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc (AXDX - Free Report) . Notably, Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 2.7% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 82%.
Accelerate Diagnostics projects long-term adjusted earnings growth of almost 30%. The stock returned 111% over the last one year.
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With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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Patterson Companies Grapples With Multiple Issues: Dump Now?
On Jun 2, we issued an updated research report on St. Paul, MN–based The Patterson Companies (PDCO - Free Report) , a leading distributor in the dental, companion-pet veterinarian and rehabilitation supply markets. The company currently carries a Zacks Rank #4 (Sell).
Patterson Companies’ unimpressive performance at the dental segment is a key concern. In fact, the 8.3% deterioration on a year-over-year basis in the last reported quarter dented overall results.
Coming to dental equipment, sales declined 17% in the last quarter, primarily due to lower sales of Sirona products and a tough comparison with regard to the year-ago quarter.
Meanwhile, Patterson Companies’ stock looks a little expensive at the moment. A comparative analysis of the company’s forward P/E (TTM basis) multiple reflects a relatively gloomy picture that might be a concern for investors. The multiple currently stands at 20.14, a bit stretched when compared to its own range over the last one year (median of 18.32).
Cutthroat competitive in the U.S. dental products distribution industry is also a major dampener. Notably, Patterson Companies faces serious competition from at least 15 full-service distributors (that include Henry Schein Dental, a unit of Henry Schein) and hundreds of small and local distributors.
The company is also expected to face challenges from the disruption caused by its sales force realignment initiative. High operating expenses have also been a major drag on margins.
Unfavorable Estimate Revision
Owing to the above-mentioned factors, the Zacks Consensus Estimate for full-year 2017 earnings dropped almost 3% to $2.33 per share, as seven out of eight analysts revised their estimates downward over the last 60 days.
For the current quarter, four analysts moved south compared to no movement in the opposite direction over the last two months. As a result, the Zacks Consensus Estimate for the current quarter fell 6.7% to 45 cents over the same time frame.
Dismal Share Price Trend
Patterson Companies has had a disappointing run on the bourse over the past three months. The company returned almost 4.7%, lower than the Zacks categorized Medical/Dental Supplies sub-industry’s gain of almost 6.3%. However, the current level is slightly higher than the S&P 500’s return of 2.8% over the same time period.
Stocks to Consider
Better-ranked stocks in the broader medical sector include Luminex Corporation , Inogen Inc. (INGN - Free Report) and Accelerate Diagnostics, Inc (AXDX - Free Report) . Notably, Luminex and Inogen sport a Zacks Rank #1 (Strong Buy), while Accelerate Diagnostics carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Luminex has an expected long-term adjusted earnings growth of almost 16.3%. The stock added roughly 2.7% over the last three months.
Inogen has a long-term expected earnings growth rate of 17.5%. The stock has a solid one-year return of around 82%.
Accelerate Diagnostics projects long-term adjusted earnings growth of almost 30%. The stock returned 111% over the last one year.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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