With over 25% of its stock sold short, trading near its 52-week lows, plus a cash pile of $100 million with no debt, PETS looks like a perfect addition to your portfolio.

1. PETMEDEXPRESS
RESEARCHANALYSIS
QUARTER III 2021
PreparedbyMeridianCapital

2. Withagrowingcashpositionof$100million,itiseasytoseewhythis
niche,direct-to-consumerretailerofpetmedicationsandsuppliesis
poisedforgrowth.
PetMedExpressInc.isanationalpetpharmacy.Theretailerofmostly
genericandspecialtymedicationsfordogsandcatssellsitsproducts
directlytoconsumers.
PETisalsooneofthemostshortedstocksonWallStreetwithashorted
floatof27%.
OVERVIEW

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THECOMPANY
FINANCIALS

4. PetMedExpressInc(PETS)doesbusinessprimarilythroughitsonline
platform,1800petmeds.com.Overthelast3years,thefirmhas
experiencedrevenuegrowthof4.14%withtotalassetsat$167million.
Thefirm,asofJune2021reportstotalliabilitiesof$28.24million,cashand
cashequivalentsof$106.50millionwith$0debt.Thefirmhas,overthe
sameperiod,experienceda10.33%declineinOperatingIncomeanda
declineof6.37%innetincome.DilutedEPShasalsotakena5.83%hitover
thesameperiodoftime.
AccordingtowebtrafficdatafromAlexa,1800petmeds.comranks#8,938
inU.Straffic.ComparedtoPETMED(petmd.com)whichranks#7,792 and
Chewy(chewy.com)wichranks#433.

5. THECOMPETITION
AlthoughPetMedExpressInc.Hastheluxuryofoperatinginthelarge$106Billion
U.Spetmarket,therearecurrentandinevitablyfuturecompetitorsthefirmmust
learntodealwith.Belowisaside-by-sidecomparisonofPETSanditsclosest
competitorsinthemarket.
THEMARKET
It’sestimatedtheUSpetindustryreached$103.6billionin2021andisprojected
tohit$358.62Billionby2027. Theindustryissteadilygrowing,yearbyyear.
AccordingtotheAPPA,61%ofpetownersarewillingtopaymoreforfoodsthat
specificallytargettheirpets'dietaryneeds. DuringCOVID,21%ofpetowners
spentmoremoneyontheirpets.
OVERVIEW

6. 31%ofpetindustrycustomersareMillennials.Catanddogownersspendabout
$300ayearonpetfoodandtreats.69%ofMillennialsoptfortheirpets’natural
andorganicproducts.43%ofdogownersand41%ofcatownersbuypremiumpet
food.
VETCAREANDMEDICATIONS
Salesforvetcareandrelatedmedicalproductswasapproximately$30.2billionfor
2020.AccordingtotheAPPA,Petownersspentmostonfoodandtreats—$36.9
billion.Vetcareandproductsaleswererightbehindwith$29.3billion,while
suppliesandOTCmedicinerakedin$19.2billion.
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Food and treats
Vet care and product
Supplies and OTC medicine
Pet insurance, grooming and boarding
2020BREAKDOWNOFPET-RELATEDSPENDINGINTHEU.S

7. Meridiancapital.XYZisnotaregisteredinvestment,legalortaxadviser,or
broker/dealer.Allinvestment/financialopinionsexpressedbyMeridiancapital.xyzare
fromthepersonalresearchandexperienceoftheowner(s)ofthesiteandassociated
personsandareintendedaseducationalmaterialonly.Ourcontent,i.eblogposts,
researchreports,sitecontent,isintendedtobeusedandmustbeusedfor
informationalpurposesonly.Itisimportanttodoyourownresearchandanalysis
beforemakinganyinvestmentdecisionswhichshouldbebasedonyourveryown
personalcircumstances.PleasenotethatMeridianCapital(thecompany)doesoften
takelongpositionsinthecompanieswewriteabout/cover.Researchmaterial,articles,
andsoforth,willoftenhighlightthevariouspositivefactorswebelieve(atthetime)a
companymayhavewhichwillreflectdatacompiledfrompublicsourcesandour
sincerehypothesisinsaidcompany'sabilitytoproducefuture(positive)returns.These
positivefactorsmustbeweighedagainstanyunforeseenadversefactorsandevents
beforemakinganyinvestmentdecisions.