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Petmed Express (PETS)
NASDAQ:PETS
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Petmed Express (PETS) AI Stock Analysis

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PETS

Petmed Express

(NASDAQ:PETS)

Rating:53Neutral
Price Target:
Petmed Express shows a mixed financial performance with strong balance sheet stability but weak profitability and inconsistent cash flow. Technical analysis indicates a bearish trend with oversold conditions, while valuation metrics suggest the stock may be overvalued. The earnings call highlights progress in profitability and strategic investments, but challenges remain in sales and competitive pressures. Overall, the stock score reflects these combined factors, indicating moderate potential with significant risks.
Positive Factors
Financial Stability
The business is well-capitalized to make it through the turnaround, with $50M of cash and no debt.
Management Strategy
The new strategy is focused on consolidating brands, improving the supply chain, focusing on customer retention, driving site traffic, improving the marketing approach, and upgrading the technology platforms.
Negative Factors
Customer Retention
The company is likely losing customers to competitors with the absence of promotions.
Financial Performance
The business has not shown growth on an organic basis in over 12 quarters, which is largely driven by competitive pressures.
Revenue Decline
Q2 revenue declined 16% to $59.6M, which was below the $66.0M estimate, indicating customers reduced spending or sought promotions from competitors.

Petmed Express (PETS) vs. SPDR S&P 500 ETF (SPY)

Petmed Express Business Overview & Revenue Model

Company DescriptionPetMed Express, Inc., together with its subsidiaries, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses. It offers non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, and other pet supplies. It sells its products through its Internet website; mobile app; telephone contact center; and direct mail/print, which includes brochures and postcards, as well as television advertising under the 1-800-PetMeds and PetMeds brands. PetMed Express, Inc. was incorporated in 1996 and is headquartered in Delray Beach, Florida.
How the Company Makes MoneyPetmed Express makes money by selling pet medications and health-related products through its online platform and call center. The company's revenue model is primarily based on the retail sale of prescription and non-prescription medications, where customers purchase products directly from Petmed Express. Key revenue streams include sales of prescription medications, which require a prescription from a vet, and non-prescription products such as flea and tick control, nutritional supplements, and hygiene products. Petmed Express benefits from its direct-to-consumer model, which eliminates the need for physical retail locations and allows for competitive pricing. Additionally, the company has established partnerships with veterinary suppliers and manufacturers to source a comprehensive range of pet health products. Factors contributing to its earnings include a broad customer base, repeat purchases from pet owners, and the growing trend of pet humanization which drives demand for high-quality pet healthcare products.

Petmed Express Earnings Call Summary

Earnings Call Date:Jul 28, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Nov 03, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in cost optimization and digital enhancements, but these were overshadowed by a notable decline in revenue and challenges in a competitive market environment. The company is focused on long-term growth and profitability, yet immediate challenges remain.
Q3-2025 Updates
Positive Updates
Return to Profitability
The company implemented cost-cutting measures and consolidation strategies, achieving $2 million in adjusted EBITDA, a $1.1 million improvement year-over-year, while lowering G&A expenses by $2.6 million compared to last year.
Inventory Optimization Success
Inventory efficiency improved significantly with inventory turn rising to 1.5 in Q3 from 1.1 in Q2 and 0.9 last year, alongside a 66% reduction in total inventory on hand.
Digital Enhancements
The company refreshed its website and mobile apps, and introduced Buy Now, Pay Later, resulting in 84,000 gross new customers and an increase in average order value by 7%.
Negative Updates
Revenue Decline
Net sales for the third quarter were $53 million, compared to $65.3 million in the same period last year, marking a 19% decline primarily due to a 34% reduction in gross advertising.
Competitive Market Challenges
The company faced a highly competitive and promotional holiday environment, leading to a strategic decision to prioritize margin protection over aggressive promotions, resulting in lower sales and new customer acquisition.
Net Loss
The company reported a net loss for the third quarter of $700,000 or $0.03 per diluted share, although this was an improvement compared to a net loss of $2 million or $0.10 per diluted share last year.
Company Guidance
During the PetMed Express Third Quarter Financial Results Conference Call for fiscal year 2025, CEO Sandra Campos outlined the company's strategic initiatives aimed at returning to profitability and driving sustainable growth. Key metrics highlighted include achieving $2 million in adjusted EBITDA for the quarter, a $1.1 million year-over-year improvement, and a reduction in G&A expenses by $2.6 million compared to last year. The company also reported 63,000 new customers with shipped orders and an increase in the average order value (AOV) by 7% to $108. Inventory efficiency improved, with inventory turn rising to 1.5 in Q3, alongside a 66% reduction in total inventory on hand. The company is focusing on enhancing the digital shopping experience, optimizing their product mix, and improving operational efficiencies. Despite a challenging competitive landscape, PetMed remains committed to customer engagement and financial discipline, as evidenced by a deliberate reduction in gross advertising spend by $2.8 million year-over-year to protect margins.

Petmed Express Financial Statement Overview

Summary
Petmed Express exhibits a mixed financial profile with strong balance sheet stability offset by weak profitability and inconsistent cash flow performance. Operational improvements are evident with positive EBIT and EBITDA margins in TTM, yet overall profitability remains a concern. The company should focus on enhancing revenue growth and optimizing free cash flow to strengthen its financial position further.
Income Statement
55
Neutral
The income statement reflects a challenging period for Petmed Express. While there is a positive gross profit margin of 26.22% in TTM, the net profit margin is low at 0.14%, indicating tight profitability. Revenue growth has been inconsistent, with a decline in revenue from 2023 to 2024. EBIT and EBITDA margins have improved from negative values in 2023 to positive in TTM, suggesting some operational improvements but overall financial performance remains weak.
Balance Sheet
72
Positive
Petmed Express maintains a solid balance sheet with a low debt-to-equity ratio of 0.01, indicating strong financial stability. The equity ratio of 66.43% is robust, reflecting a healthy capital structure. Return on equity is modest at 0.37%, impacted by low profitability. Cash reserves are strong, providing a cushion against potential financial volatility.
Cash Flow
68
Positive
The cash flow statement shows mixed performance. The operating cash flow to net income ratio is strong at 13.54, indicating effective cash generation relative to net income. However, free cash flow growth is volatile, and the free cash flow to net income ratio is low at 2.40, reflecting limited free cash flow relative to earnings. While cash flow from operations is stable, improvements in free cash flow are necessary.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue281.06M256.86M273.42M309.21M284.13M
Gross Profit78.65M71.01M78.08M89.95M81.25M
EBITDA-1.11M10.99M27.03M32.96M33.23M
Net Income-7.46M5.14M18.72M23.92M25.85M
Balance Sheet
Total Assets169.88M164.12M176.32M187.50M155.32M
Cash, Cash Equivalents and Short-Term Investments55.30M104.09M111.08M118.72M103.76M
Total Debt1.45M0.000.000.000.00
Total Liabilities73.15M40.32M34.13M46.22M25.31M
Stockholders Equity96.73M123.80M142.19M141.28M130.01M
Cash Flow
Free Cash Flow-194.00K22.54M16.75M37.64M36.53M
Operating Cash Flow4.32M27.80M18.50M40.08M38.84M
Investing Cash Flow-40.67M-10.26M-1.75M-2.43M-2.31M
Financing Cash Flow-12.44M-24.54M-24.38M-22.69M-33.30M

Petmed Express Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price3.16
Price Trends
50DMA
3.27
Negative
100DMA
3.43
Negative
200DMA
4.09
Negative
Market Momentum
MACD
-0.06
Negative
RSI
48.89
Neutral
STOCH
55.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PETS, the sentiment is Neutral. The current price of 3.16 is above the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.27, and below the 200-day MA of 4.09, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 48.89 is Neutral, neither overbought nor oversold. The STOCH value of 55.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PETS.

Petmed Express Risk Analysis

Petmed Express disclosed 33 risk factors in its most recent earnings report. Petmed Express reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Petmed Express Peers Comparison

Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
55
Neutral
$10.32B-60.49%8.35%6.22%-8.21%
53
Neutral
$63.00M285.050.36%-10.82%
51
Neutral
$7.83B-0.18-40.10%2.29%21.46%-2.03%
48
Neutral
$308.21M301.60%37.74%69.79%
47
Neutral
$111.70M-63.24%-87.65%11.76%
44
Neutral
$60.51M40.55%-3.15%82.04%
43
Neutral
$95.13M-130.27%35.81%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
PETS
Petmed Express
3.16
0.05
1.61%
WBA
Walgreens Boots Alliance
11.98
3.00
33.41%
YI
111
6.82
-0.98
-12.56%
LFMD
LifeMD
6.41
1.28
24.95%
SRZN
Surrozen
11.40
1.46
14.69%
ADAG
Adagene
2.19
-0.71
-24.48%

Petmed Express Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
PetMed Express Appoints Peter Batushansky to Board
Neutral
Apr 9, 2025

On April 9, 2025, PetMed Express, Inc. announced the appointment of Peter Batushansky to its Board of Directors, expanding the board from six to seven members. Mr. Batushansky, who brings over 20 years of experience in retail, pet, healthcare, and private equity, will also serve on the Audit and Corporate Governance and Nominating Committees. His appointment is part of the company’s strategic board refreshment to support its transformation strategy. Concurrently, longtime board member and former Chairman Dr. Gian Fulgoni announced his intention to retire at the 2025 annual shareholders’ meeting, after which the board will revert to six members.

Spark’s Take on PETS Stock

According to Spark, TipRanks’ AI Analyst, PETS is a Neutral.

Petmed Express’s overall stock score reflects a mixed financial and strategic outlook. Strong balance sheet stability is offset by weak profitability and overvaluation concerns. The recent earnings call highlights improvements in profitability and cost management, but declining sales and a challenging competitive environment weigh on the score. Technical indicators suggest bearish trends, further impacting the overall assessment.

To see Spark’s full report on PETS stock, click here.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 22, 2025