Bank of America Raises EPS on PetMed after 3Q Revenue Report

Bank of America has published a research report on PetMed Express

after the company reported 3Q revenues that outran company costs. In the report, Bank of America writes, "Revenue growth (+12%) was higher than our forecast (-2%), on better reorder (+9%) and new customer (+29%) sales. However, the gross margin deteriorated 356 bps yoy and was 56 bps below plan with a decline in average retail purchases (-5%) to $73/transaction. While administrative spending improved 92 bps yoy, higher advertising spend (+94 bps yoy) contributed to a 358 bps decline in the EBITDA margin. PETS used $2.5 million in cash and repurchased 118,000 shares ($1 million)." Bank of America maintains its Underperform rating and $7 price objective on PetMed Express, which is currently trading up $0.44 from Friday's $30.40 closing price.