0.51 | 0.74%
PETSMART INC's gross profit margin for the first quarter of its fiscal year 2013 is essentially unchanged when compared to the same period a year ago. The company has grown sales and net income during the past quarter when compared with the same quarter a year ago, however, it was unable to keep up with the growth of the average competitor within its industry. PETSMART INC has weak liquidity. Currently, the Quick Ratio is 0.52 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.
During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.38% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.
| Income Statement | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Net Sales ($mil) | 1710.6 | 1629.89 |
| EBITDA ($mil) | 226.43 | 214.06 |
| EBIT ($mil) | 167.52 | 154.35 |
| Net Income ($mil) | 102.42 | 94.68 |
| Balance Sheet | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Cash & Equiv. ($mil) | 333.32 | 375.02 |
| Total Assets ($mil) | 2474.18 | 2466.4 |
| Total Debt ($mil) | 525.62 | 551.92 |
| Equity ($mil) | 1051.26 | 1099.48 |
| Profitability | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Gross Profit Margin | 34.41 | 34.18 |
| EBITDA Margin | 13.23 | 13.13 |
| Operating Margin | 9.79 | 9.47 |
| Sales Turnover | 2.76 | 2.54 |
| Return on Assets | 16.05 | 12.73 |
| Return on Equity | 37.78 | 28.56 |
| Debt | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Current Ratio | 1.66 | 1.83 |
| Debt/Capital | 0.33 | 0.33 |
| Interest Expense | 13.17 | 14.13 |
| Interest Coverage | 12.72 | 10.92 |
| Share Data | Q1 FY13 | Q1 FY12 |
|---|---|---|
| Shares outstanding (mil) | 103.29 | 108.39 |
| Div / share | 0.0 | 0.14 |
| EPS | 0.98 | 0.85 |
| Book value / share | 10.18 | 10.14 |
| Institutional Own % | n/a | n/a |
| Avg Daily Volume | 1297369.0 | 1607472.0 |
BUY. PETSMART INC's P/E ratio indicates a discount compared to an average of 21.87 for the Specialty Retail industry and a value on par with the S&P 500 average of 18.91. Conducting a second comparison, its price-to-book ratio of 6.77 indicates a significant premium versus the S&P 500 average of 2.42 and a premium versus the industry average of 5.44. The price-to-sales ratio is below both the S&P 500 average and the industry average, indicating a discount. The valuation analysis reveals that, PETSMART INC seems to be trading at a discount to investment alternatives within the industry.
| Price/Earnings |
|
Price/Cash Flow |
| |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| PETM 18.73 | Peers 21.87 | PETM 11.04 | Peers 14.53 | |||||||||||||||||||||
|
Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations. PETM is trading at a discount to its peers. |
Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures. PETM is trading at a discount to its peers. |
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| Price/Projected Earnings |
|
Price to Earnings/Growth |
|
|||||||||||||||||||||
| PETM 15.25 | Peers 19.55 | PETM 1.71 | Peers 1.43 | |||||||||||||||||||||
|
Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations. PETM is trading at a discount to its peers. |
Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples. PETM trades at a premium to its peers. |
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| Price/Book |
|
Earnings Growth |
|
|||||||||||||||||||||
| PETM 6.77 | Peers 5.44 | PETM 31.42 | Peers 23.05 | |||||||||||||||||||||
|
Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet. PETM is trading at a premium to its peers. |
Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios. PETM is expected to have an earnings growth rate that significantly exceeds its peers. |
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| Price/Sales |
|
Sales Growth |
|
|||||||||||||||||||||
| PETM 1.04 | Peers 1.32 | PETM 9.37 | Peers 10.00 | |||||||||||||||||||||
|
Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales. PETM is trading at a discount to its industry on this measurement. |
Average. Comparing a company's sales growth to its industry helps to determine if the company is adding or losing market share. PETM is keeping pace with its peers on the basis of sales growth. |
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