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Did PetIQ’s (NASDAQ:PETQ) Share Price Deserve to Gain 16%?

Simply Wall St

While PetIQ, Inc. (NASDAQ:PETQ) shareholders are probably generally happy, the stock hasn’t had particularly good run recently, with the share price falling 13% in the last quarter. But that doesn’t change the reality that over twelve months the stock has done really well. After all, the share price is up a market-beating 16% in that time.

Check out our latest analysis for PetIQ

PetIQ isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year PetIQ saw its revenue grow by 81%. That’s a head and shoulders above most loss-making companies. The solid 16% share price gain goes down pretty well, but it’s not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate PetIQ in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

NasdaqGS:PETQ Income Statement, March 12th 2019

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling PetIQ stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It’s nice to see that PetIQ shareholders have gained 16% over the last year. We regret to report that the share price is down 13% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.

PetIQ is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.