Fact based stock research
Pets at Home (LSE:PETS)

GB00BJ62K685

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Pets at Home stock research in summary

investors.petsathome.com

ANALYSIS: With an Obermatt Combined Rank of 53 (better than 53% compared with investment alternatives), Pets at Home (Specialty Stores, United Kingdom) shares have above-average financial characteristics compared with similar stocks. Shares of Pets at Home are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 40) but are safely financed (Safety Rank of 68), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 53, is a buy recommendation based on Pets at Home's financial characteristics. As the company Pets at Home's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 40), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 68) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	49
Growth Rank	40
Safety Rank	68
Combined Rank	53

Country	United Kingdom
Industry	Specialty Stores
Index	FTSE All Shares, FTSE 250, FTSE 350, Dividends Europe, Employee Focus EU
Size class	Large

This stock has achievements: Top 10 Stock.

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Pets at Home

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	75	55	55	49
GROWTH
GROWTH	26	49	69	40
SAFETY
SAFETY	26	38	60	68
SENTIMENT
SENTIMENT	n/a	81	90	^new
360° VIEW
360° VIEW	n/a	63	96	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 28-Mar-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Pets at Home is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	75	55	55	49
GROWTH
GROWTH	26	49	69	40
SAFETY
SAFETY	26	38	60	68
COMBINED
COMBINED	24	48	85	53

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Pets at Home the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), Pets at Home shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Pets at Home. Expected dividend yields are higher than for 77% of comparable companies (a Dividend Yield rank of 77), making the stock attractive. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 52, which means that the stock price is lower compared with invested capital than for 52% of comparable investments. But in respect to sales and profits, the picture is reversed. Price-to-Sales is 19 which means that the stock price compared with what market professionals expect for future profits is higher than for 81% of comparable companies, indicating a low value concerning Pets at Home's sales levels. The Price-to-Profit ratio (also referred to as price-earnings (P/E) ratio) is also unfavorable for Pets at Home with a rank of 49. This means that the stock price, compared with what market professionals expect for future profits, is higher than for 51% of comparable companies, indicating a low value concerning Pets at Home's profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on Pets at Home's stock price compared with the company's operational size and dividend yields. The company seems confident that it can generate a reasonable return on invested capital, because it pays an above-average dividend while profits are below what you would expect for a company with this stock price. If you agree with this practice and believe that profits will return to higher levels, as the current dividend policy suggests, Pets at Home may be an attractive investment. If this is not the case, you may want to be careful with this stock as it is also expensive compared with its expected revenue levels. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	32	22	17	19
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	61	34	35	49
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	56	55	45	52
DIVIDEND YIELD
DIVIDEND YIELD	78	76	82	77
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	75	55	55	49

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Pets at Home; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 40 (better than 40% compared with alternatives), Pets at Home shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Pets at Home. Sales Growth has a below market rank of 42, which means that, currently, professionals expect the company to grow less than 58% of its competitors. The same is valid for Capital Growth, with a rank of 41, and Profit Growth, with a rank of 38. Currently, professionals expect the company to grow its profits less than 62% of its competitors). Only shareholders are optimistic. Stock Returns are above average at a rank of 51, which means that the stock returns have recently been above 51% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 40, is a hold recommendation for growth and momentum investors. That picture may be the result for a company that has reached the bottom. All went south for Pets at Home, and it still looks bad, but some investors already see light at the end of the tunnel, rewarding the stock with recent above-market stock returns. It could also mean that investors are correcting an overreaction to negative news. If that were the case, the positive stock returns are not yet a sign of recovery. Investors should look closely at the Value and Sentiment indicators before they make a stock purchasing decision, because growth is unlikely to be the driving argument behind this investment. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	34	27	55	42
PROFIT GROWTH
PROFIT GROWTH	46	73	41	38
CAPITAL GROWTH
CAPITAL GROWTH	n/a	18	61	41
STOCK RETURNS
STOCK RETURNS	55	61	74	51
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	26	49	69	40

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Pets at Home.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 68 (better than 68% compared with alternatives), the company Pets at Home has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Pets at Home is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Pets at Home. Leverage is at a rank of 76, meaning the company has a below-average debt-to-equity ratio. It has less debt than 76% of its competitors. Liquidity is also good at a rank of 82, meaning the company generates more profit to service its debt than 82% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 21, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 79% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 68 (better than 68% compared with alternatives), Pets at Home has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Pets at Home. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. Investors may have a short-term debt challenge with Pets at Home and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	28	74	73	76
REFINANCING
REFINANCING	24	17	20	21
LIQUIDITY
LIQUIDITY	65	56	77	82
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	26	38	60	68

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Pets at Home and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	70	64	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	15	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	20	94	^new
MARKET PULSE
MARKET PULSE	n/a	90	93	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	81	90	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Pets at Home.
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