PetMed Express, Inc. (NASDAQ:PETS) just released its annual report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.9% to hit US$284m. Statutory earnings per share (EPS) came in at US$1.29, some 5.1% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, PetMed Express' dual analysts are now forecasting revenues of US$299.4m in 2021. This would be a reasonable 5.4% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to climb 19% to US$1.54. In the lead-up to this report, the analysts had been modelling revenues of US$286.1m and earnings per share (EPS) of US$1.46 in 2021. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
It will come as no surprise to learn that the analysts have increased their price target for PetMed Express 19% to US$28.00 on the back of these upgrades.
Of course, another way to look at these forecasts is to place them into context against the industry itself. Next year brings more of the same, according to the analysts, with revenue forecast to grow 5.4%, in line with its 5.2% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 16% per year. So although PetMed Express is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards PetMed Express following these results. Fortunately, they also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2022, which can be seen for free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with PetMed Express .
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