PETQ - Embedded Expectations Analysis - 2020 11 02
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 demandSpecifically, 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
PetIQ is a holding company. Through its subsidiaries, the company is a pet medication and wellness company providing veterinary products and services. The company's Rx pet medications include heartworm preventatives, arthritis, thyroid, diabetes and pain treatments, antibiotics and other specialty medications, all of which require a prescription from a veterinarian. The OTC medications the company sells are primarily comprised of flea and tick control products, which are available in multiple forms that consumers choose between, such as spot on (topical) treatments, chewables, and collars. The company's health and wellness products include treats and other pet products such as dental treats and nutritional supplements.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.