PetMed Express, Inc. (NASDAQ:PETS) shareholders are probably feeling a little disappointed, since its shares fell 4.8% to US$4.13 in the week after its latest full-year results. Revenues were in line with expectations, at US$281m, while statutory losses ballooned to US$0.37 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
NasdaqGS:PETS Earnings and Revenue Growth June 15th 2024
Following last week's earnings report, PetMed Express' twin analysts are forecasting 2025 revenues to be US$281.3m, approximately in line with the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 40% to US$0.22. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$299.7m and losses of US$0.01 per share in 2025. So it's pretty clear the analysts have mixed opinions on PetMed Express after this update; revenues were downgraded and per-share losses expected to increase.
The average price target fell 32% to US$5.25, implicitly signalling that lower earnings per share are a leading indicator for PetMed Express' valuation.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's also worth noting that the years of declining revenue look to have come to an end, with the forecast stauing flat to the end of 2025. Historically, PetMed Express' top line has shrunk approximately 1.6% annually 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 revenue grow 4.7% per year. Although PetMed Express' revenues are expected to improve, it seems that it is still expected to grow slower than the wider industry.
The Bottom Line
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at PetMed Express. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of PetMed Express' future valuation.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.
We don't want to rain on the parade too much, but we did also find 1 warning sign for PetMed Express that you need to be mindful of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com