Petiq Inc Receives a Buy from Jefferies


In a report released today, Kevin Grundy from Jefferies reiterated a Buy rating on Petiq Inc (NASDAQ: PETQ), with a price target of $32. The company’s shares closed on Friday at $26.86, close to its 52-week high of $28.23.

Grundy noted:

“We remain bullish on PETQ and lift our PT to $32 (+21% TSR) following a WMT store visit to a new VetIQ Petcare clinic in Lehighton, PA. With some ~50%/85% of PETQ’s profit growth levered to its services roll-out in FY18-20/21-23, resp., execution and proof of concept are critical to the co.’s LT success. PETQ offers attractive 15%/25% sales/EPS growth and trades at 15.5x EV/EBITDA (vs. 21.5x for high growth retailers), making it our top small cap growth idea. We remain bullish on PETQ’s outlook and lift our PT to $32 (+21% TSR) post a WMT store visit to one of the new VetIQ Petcare clinics in Lehighton, PA. Following PETQ’s 1Q acquisition of vip.petcare and announced plans to build 1,000 new vet clinics over the next five years, the VetIQ Petcare rollout takes on critical importance for the stock. That is, we expect services to drive some ~45%/~50% of sales/EBITDA growth in in FY21-23.”

According to TipRanks.com, Grundy is a 4-star analyst with an average return of 6.2% and a 68.5% success rate. Grundy covers the Consumer Goods sector, focusing on stocks such as Coca-Cola European Partners, Edgewell Personal Care, and Monster Beverage Corp.

Petiq Inc has an analyst consensus of Strong Buy, with a price target consensus of $30.

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Based on Petiq Inc’s latest earnings release for the quarter ending March 31, the company reported a quarterly GAAP net loss of $2.03 million. In comparison, last year the company had a net profit of $6.07 million.

Based on the recent corporate insider activity of 9 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of PETQ in relation to earlier this year.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

PetIQ, Inc. is a holding company, which engages in the manufacture, procurement, packaging, and distribution of pet health and wellness products. It operates through the Domestic and International segments. The Domestic segment involves the Unites States and Canada markets. The International segment deals with Europe.

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