An Earnings Overreaction in PetMed Express? (PETS)
PetMed Express Inc. (NASDAQ: PETS) is far from your usual company. The company specializes in online drug orders for your pets and it is arguable enough that the company could eventually be considered a potential takeover candidate. The market cap…
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The company beat earnings on the surface for the latest quarter as net income was $4 million, or $0.20 EPS, versus $4.1 million, or $0.19 EPS. The report shows that earnings per share was up while net income fell due to there being fewer shares on the market compared to a year ago. Revenue rose to $55.9 million from $50.9 million a year ago.
PetMed Express acquired about 162,000 new customers during the fourth quarter compared to 130,000 during the same period a year ago. That 25% increase allowed for the company to end its last fiscal year with a total yearly gain of approximately 722,000 customers compared to 645,000 for the year earlier. Online sales rose by 16% for the quarter and were up by 8% for the year ended March 31, 2012.
A higher operating cost bit into earnings in part due to advertising expenses. Shares are down by 19% at $11.12 against a 52-week range of $8.51 to $14.77. If the company can manage to hit its consensus earnings targets then this site trades at just over 14-times is new adjusted share price.
Any time you see a move like this it is hard to wonder if you are not seeing a large overreaction on that particular day.
JON C. OGG
Contact [email protected] for any questions or corrections.
Jon Ogg has been a financial news analyst since 1997. Mr. Ogg set up one of the first audio squawk box services for traders called TTN, which he sold in 2003. He has previously worked as a licensed broker to some of the top U.S. and E.U. financial institutions, managed capital, and has raised private capital at the seed and venture stage. He has lived in Copenhagen, Denmark, as well as New York and Chicago, and he now lives in Houston, Texas. Jon received a Bachelor of Business Administration in finance at University of Houston in 1992. www.247wallst.com.
