Last Updated: 17 Sep 2024
Executive Summary
Patterson Companies Inc. (PDCO) is a leading distributor of dental and animal health products in North America. The company's stock has underperformed the broader market in recent months, but its fundamentals remain strong. PDCO is trading at a discount to its peers and analysts expect the company to continue to grow its earnings in the coming years.
Company Overview
Patterson Companies Inc. was founded in 1954 and is headquartered in Saint Paul, Minnesota. The company has a market capitalization of $1.93 billion and employs over 7,000 people. PDCO operates through two segments: Dental and Animal Health. The Dental segment distributes dental equipment, supplies, and services to dentists in the United States and Canada. The Animal Health segment distributes animal health products and services to veterinarians and animal owners in the United States and the United Kingdom.
Fundamental Analysis
PDCO's financial performance has been solid in recent years. The company's revenue has grown at a compound annual growth rate (CAGR) of 4.5% over the past five years. PDCO's earnings per share (EPS) have also grown at a CAGR of 5.3% over the same period. The company's gross profit margin has been stable at around 21% in recent years. PDCO's operating margin has also been stable at around 3%. The company's return on assets (ROA) and return on equity (ROE) have both been around 6% in recent years.
PDCO's balance sheet is also strong. The company has a low level of debt and a high level of cash. PDCO's current ratio is 1.2 and its debt-to-equity ratio is 0.3.
Technical Analysis
PDCO's stock price has been in a downtrend since early 2023. The stock is currently trading below its 50-day and 200-day moving averages. The relative strength index (RSI) is also below 50, indicating that the stock is oversold.
Short Term Outlook
PDCO's stock price is likely to remain under pressure in the short term. The company's earnings are expected to decline in the next quarter due to the impact of the COVID-19 pandemic. The stock is also trading at a discount to its peers.
Long Term Outlook
PDCO's long-term outlook is positive. The company is a leader in the dental and animal health markets. The company's fundamentals are strong and its stock is trading at a discount to its peers. PDCO is expected to continue to grow its earnings in the coming years.
Analyst Recommendations
Analysts are generally positive on PDCO. The consensus rating on the stock is "Hold". The average price target for the stock is $26.44.
