Bank of America/Merrill Lynch said the dental, veterinary, and rehabilitation supplier is attractive, based on a sum-of-the-parts valuation.
The firm set a $47 price target.
TheStreet Ratings team rates PATTERSON COMPANIES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate PATTERSON COMPANIES INC (PDCO) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its increase in net income, robust revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Health Care Providers & Services industry average. The net income increased by 9.6% when compared to the same quarter one year prior, going from $45.89 million to $50.29 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 20.4%. Since the same quarter one year prior, revenues rose by 20.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- The current debt-to-equity ratio, 0.49, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.49, which illustrates the ability to avoid short-term cash problems.
- Net operating cash flow has significantly increased by 225.53% to $68.77 million when compared to the same quarter last year. In addition, PATTERSON COMPANIES INC has also vastly surpassed the industry average cash flow growth rate of 11.01%.
- PATTERSON COMPANIES INC has improved earnings per share by 11.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PATTERSON COMPANIES INC reported lower earnings of $1.97 versus $2.03 in the prior year. This year, the market expects an improvement in earnings ($2.25 versus $1.97).
- You can view the full analysis from the report here: PDCO Ratings Report