Research

PETQ – Market expectations are for Uniform ROA to decline, but management is confident about their clinics, performance, and consumer demand

November 2, 2020
  • PetIQ, Inc. (PETQ:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 31.7x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, but management is confident about opening clinics, performance, and consumer demand
  • Specifically, management generated an excitement marker when saying their safety protocols mean they can operate in an open environment, even if there are additional shutdowns. In addition, they are confident that 50% of their clinics would be open by the end of August, that business performance would exceed their original guidance, and that customers who could not shop during the lockdown came to stores in July. Furthermore, they are confident about their efficient line management systems that comply with social distancing requirements, and the increased demand for essential pet health and wellness products during the lockdown period