Why PetMed Shares Popped

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of retail pet pharmacy PetMed Express climbed 13% today after the company's quarterly results topped Wall Street expectations. 

So what: The stock has soared over the year on better-than-expected growth, and today's first-quarter results -- profit rose 20% on a top-line increase of 7.6% -- only reinforce that trend. PetMed also said that it acquired about 207,000 new customers, versus 197,000 in the year-ago period, all while gross margins stayed steady, suggesting that its competitive position is steadily strengthening.

Given the company's solid trend of new customer and average order growth, I'd expect the positive earnings momentum to continue.

"For the remainder of Fiscal 2014 we are focusing on improving our advertising efficiency and continuing to expand our product offerings," said President and CEO Menderes Akdag.

Of course, with the stock now up more than 90% over its 52-week lows and trading at a PEG ratio above 3, much of those prospects might already be baked into the valuation.

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The article Why PetMed Shares Popped originally appeared on Fool.com.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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