Back to top

PetMed Express Focuses on Advertising, Competition Rife

Read MoreHide Full Article

On Aug 28, we issued an updated research report on PetMed Express, Inc. (PETS - Free Report) . Operating as 1-800-PetMeds, the company is a leading nationwide pet pharmacy. PetMed currently sports a Zacks Rank #1 (Strong Buy).

Over the last six months, PetMed has been trading above the broader industry. Per the last trading price, the company has gained a stupendous 69.3% when compared to the 27.6% gain of the broader industry.

PetMed posted better-than-expected results in the first quarter, marking a solid start to fiscal 2018. We are encouraged by the significant increase in reorder sales and new order sales in the quarter as well.

We expect the company’s impressive first-quarter performance to maintain the momentum. PetMed is striving to implement several strategies to revitalize its top line. These include focusing on advertising efficiency to boost new order sales and shifting sales to higher margin items, while also expanding product offerings. However, we are apprehensive about the escalating advertising expenses incurred in the quarter.

The company markets its products primarily under well-known brands of medication such as Frontline Plus, K9 Advantix, Advantage, Heartgard Plus, Sentinel and Interceptor, among others.

On the flip side, PetMed operates in a highly competitive and fragmented pet medications market. The competitors include veterinarians, traditional retailers, other mail-order and online retailers of pet medications and other health products. Also, the acquisition of Novartis’ animal health division by Eli Lilly and Company has given rise to more challenges for PetMed.

Other Key Picks

A few other top-ranked medical stocks are IDEXX Laboratories, Inc. (IDXX - Free Report) , Lantheus Holdings, Inc. (LNTH - Free Report) and Edwards Lifesciences Corporation (EW - Free Report) . Edwards Lifesciences sports a Zacks Rank #1, while Lantheus Holdings and IDEXX Laboratories carry a Zacks Rank #2 (Buy). You cansee the complete list of today’s Zacks #1 Rank stocks here.

Edwards Lifesciences has a long-term expected earnings growth rate of 15.2%. The stock has rallied roughly 20.4% over the last six months.

Lantheus Holdings has a long-term expected earnings growth rate of 12.5%. The stock has gained 26.9% over the last six months.

IDEXX Laboratories has a long-term expected earnings growth rate of 19.8%. The stock has gained around 2.3% over the last six months.

Zacks' 10-Minute Stock-Picking Secret

Since 1988, the Zacks system has more than doubled the S&P 500 with an average gain of +25% per year. With compounding, rebalancing, and exclusive of fees, it can turn thousands into millions of dollars.

But here's something even more remarkable: You can master this proven system without going to a single class or seminar. And then you can apply it to your portfolio in as little as 10 minutes a month.

Learn the secret >>

More from Zacks Analyst Blog

You May Like