Now here’s an interesting story; PetIQ (PETQ) is the leading provider of pet-related products, services and medications that used to be only available at veterinary clinics — more and more of these products are being sold at retail, notes Mike Cintolo, growth stock expert and editor of Cabot Top Ten Trader.
PetIQ has a 95% market share of prescription pet meds sold at retail and the company distributes 500-plus meds and 200-plus of its own products to all the big retail outlets (Walmart, Target, Dollar General. Publix, Costco, BJs, Petco, CVS, you name it.)
The firm is also heavy on the vet side of the industry, too — it anticipates opening a whopping 1,000 new pet wellness centers by 2023 (up from just a few dozen today), giving the company its own demand for medications, with the centers producing solid operating metrics after a year.
All told, these markets (pet supplies and vet services) are huge and growing (should be $52 billion by 2023!), and PetIQ is taking advantage of that with rapid growth — revenue growth is both big and accelerating, and earnings and EBITDA (up 108% from a year ago in Q2) are growing even faster.
Management sees revenues of $500 million this year (up 88%) and thinks they’ll at least double by 2023 (likely very conservative), while EBITDA will do much better than that. It’s not changing the world, but PetIQ looks like it’s in the right place at the right time as the buying patterns of this giant industry shift to retail.
PETQ came public in July of last year, advanced to $28 by September and then went to work building a big IPO base — after a couple of dips into the teens, the stock was back near its highs in June when it started to tighten up.
Then came the quarterly report, and the action since then has been superb, with PETQ staging an explosive breakout and follow-through. It’s wild and wooly, but we’re OK nibbling here or on dips with a loose stop.
