On Mar 22, we retained our Outperform recommendation on
). 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
) 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,
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
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
Other Stocks to Consider
Other medical device stocks worth a look are
). All these stocks carry a Zacks Rank #1 (Strong Buy).
CYBERONICS INC (CYBX): Free Stock Analysis
CYTOKINETCS INC (CYTK): Free Stock Analysis
NOVARTIS AG-ADR (NVS): Free Stock Analysis
PETMED EXPRESS (PETS): Free Stock Analysis
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