PetSmart Inc. (PETM): Today's Featured Services Laggard

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

PetSmart ( PETM) pushed the Services sector lower today making it today's featured Services laggard. The sector as a whole closed the day up 0.8%. By the end of trading, PetSmart fell $1.43 (-2.2%) to $63.98 on average volume. Throughout the day, 1.7 million shares of PetSmart exchanged hands as compared to its average daily volume of 1.1 million shares. The stock ranged in price between $63.67-$65.64 after having opened the day at $65.50 as compared to the previous trading day's close of $65.41. Other companies within the Services sector that declined today were: Life Time Fitness ( LTM), down 22.4%, Seacor Holdings ( CKH), down 22.1%, Mecox Lane ( MCOX), down 12.8%, and VirtualScopics ( VSCP), down 12.2%.
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PetSmart, Inc., together with its subsidiaries, operates as a specialty retailer of products, services, and solutions for pets in the United States, Puerto Rico, and Canada. PetSmart has a market cap of $7 billion and is part of the specialty retail industry. The company has a P/E ratio of 20.2, above the S&P 500 P/E ratio of 17.7. Shares are down 4.7% year to date as of the close of trading on Thursday. Currently there are nine analysts that rate PetSmart a buy, no analysts rate it a sell, and 12 rate it a hold.

TheStreet Ratings rates PetSmart as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, compelling growth in net income, revenue growth and notable return on equity. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.

On the positive front, Inuvo ( INUV), up 28.9%, Build-A-Bear Workshop ( BBW), up 23.2%, SED International Holdings ( SED), up 20.7%, and ChinaNet Online Holdings ( CNET), up 18.8%, were all gainers within the services sector with Target ( TGT) being today's featured services sector leader.

For investors not wanting singular stock exposure, ETFs may be of interest. Investors who are bullish on the services sector could consider iShares Dow Jones US Cons Services ( IYC) while those bearish on the services sector could consider ProShares Ultra Short Consumer Sers ( SCC).

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