New Lifetime High Reached: PetSmart (PETM)

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 $201.6 million.
  • PETM has traded 1.0 million 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%. PETM has a PE ratio of 19.3. Currently there are no analysts that rate PetSmart a buy, no analysts rate it a sell, and 15 rate it a hold.

The average volume for PetSmart has been 1.6 million shares per day over the past 30 days. PetSmart has a market cap of $8.1 billion and is part of the services sector and specialty retail industry. The stock has a beta of 0.23 and a short float of 2.8% with 1.13 days to cover. Shares are up 0.5% year-to-date as of the close of trading on Friday.

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

TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates PetSmart as a buy. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth, reasonable valuation levels, good cash flow from operations and growth in earnings per share. We feel these strengths outweigh the fact that the company has had sub par growth in net income.

Highlights from the ratings report include:
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 28.94% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, PETM should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. 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.
  • Net operating cash flow has increased to $125.35 million or 16.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -6.46%.
  • 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 ($4.42 versus $4.03).

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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