Piper Jaffray Upgrades PetMed Express (PETS) to Overweight
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Piper Jaffray & Co. upgrades PetMed Express (Nasdaq: PETS) from Neutral to Overweight. Price target increased from $19 to $22.
Piper analyst says, "Following excellent June quarter results that left us incrementally more optimistic with our FY2010-2011 outlook, we are upgrading shares of PETS from Neutral to Overweight. Our Neutral rating had been based primarily on valuation, given our previous expectations for mid-teens earnings growth over the next 2-3 years. However, excellent new customer growth (+11% yoy), margin expansion and better than expected cost to acquire metrics (-12% yoy) leave us more optimistic in our PETS outlook and we are now modeling for earnings growth of 21.3% and 16.5% in FY10 and FY11, respectively."
"Following strong Q1 results, we are now forecasting FY10 gross margin of 38.8% (was 38.7%), 12.0% advertising expense (was 12.4%) and revenues of $247.1 MM (was $244.8). These changes, along with the Q1 beat, increase our FY10 and FY11 EPS ests. by $0.05 to $1.19 and $1.38, respectively."
To see more analyst ratings on PETS Click Here.
PetMed Express, Inc., doing business as 1-800-PetMeds, markets prescription and non-prescription pet medications; and other health products for dogs, cats, and horses direct to the consumer in the United States.
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