PetSmart (PETM) Hits New Lifetime High Today

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified PetSmart ( PETM) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified PetSmart as such a stock due to the following factors:

  • PETM has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $80.7 million.
  • PETM has traded 26,494 shares today.
  • PETM is trading at a new lifetime high.

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More details on PETM:

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. The stock currently has a dividend yield of 1.1%. PETM has a PE ratio of 17.6. Currently there are no analysts that rate PetSmart a buy, 1 analyst rates it a sell, and 17 rate it a hold.

The average volume for PetSmart has been 811,000 shares per day over the past 30 days. PetSmart has a market cap of $7.3 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.19 and a short float of 6.7% with 6.46 days to cover. Shares are up 1.2% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PetSmart as a buy. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, growth in earnings per share, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.3%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PETSMART INC's earnings per share improvement from the most recent quarter was slightly positive. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, PETSMART INC increased its bottom line by earning $4.03 versus $3.55 in the prior year. This year, the market expects an improvement in earnings ($4.34 versus $4.03).
  • The current debt-to-equity ratio, 0.42, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.40 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Specialty Retail industry and the overall market, PETSMART INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.

STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.

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