at Home Group (LSE:PETS) - Share price, News & Analysis

Q: What is the Fair Price of PETS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

PETS (£3.17) is trading below our estimate of [[fair value]] (£6.05)

PETS fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	2/6
Past Performance	4/6
Financial Health	5/6
Dividends	3/6

PETS Stock Overview

Pets at Home Group Plc engages in the specialist omnichannel retailing of pet food, pet related products, and pet accessories in the United Kingdom.

Rewards

Trading at 47.7% below our estimate of its fair value

Earnings are forecast to grow 3.46% per year

Earnings have grown 16.8% per year over the past 5 years

Risk Analysis

Unstable dividend track record

Significant insider selling over the past 3 months

at Home Group Competitors

Watches of Switzerland Group

LSE:WOSG

UK£1.9b

JD Sports Fashion

LSE:JD.

UK£6.0b

Card Factory

LSE:CARD

UK£161.8m

Gear4music (Holdings)

AIM:G4M

UK£37.8m

Price History & Performance

Summary of all time highs, changes and price drops for at Home Group
Historical stock prices
Current Share Price	UK£3.17
52 Week High	UK£5.25
52 Week Low	UK£2.67
Beta	0.41
1 Month Change	-8.23%
3 Month Change	-12.40%
1 Year Change	-30.57%
3 Year Change	64.21%
5 Year Change	94.83%
Change since IPO	33.03%

Shareholder Returns

	PETS	GB Specialty Retail	GB Market
7D	0.4%	1.8%	2.4%
1Y	-30.6%	-25.4%	-6.7%

Return vs Industry: PETS underperformed the UK Specialty Retail industry which returned -25% over the past year.

Return vs Market: PETS underperformed the UK Market which returned -6.8% over the past year.

Price Volatility

Is PETS's price volatile compared to industry and market?
PETS volatility
PETS Average Weekly Movement	6.2%
Specialty Retail Industry Average Movement	6.3%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.6%
10% least volatile stocks in GB Market	2.8%

Stable Share Price: PETS is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: PETS's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1991	10,262	Lyssa McGowan	https://investors.petsathome.com

Pets at Home Group Plc engages in the specialist omnichannel retailing of pet food, pet related products, and pet accessories in the United Kingdom. It operates through three segments: Retail, Vet Group, and Central. The company offers a range of pet foods for dogs, cats, small animals, fish, reptiles, and birds.

at Home Group Fundamentals Summary

How do at Home Group's earnings and revenue compare to its market cap?
PETS fundamental statistics
Market Cap	UK£1.57b
Earnings (TTM)	UK£124.50m
Revenue (TTM)	UK£1.32b

12.6x

P/E Ratio

1.2x

P/S Ratio

Is PETS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PETS income statement (TTM)
Revenue	UK£1.32b
Cost of Revenue	UK£670.40m
Gross Profit	UK£647.40m
Other Expenses	UK£522.90m
Earnings	UK£124.50m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 25, 2022

Earnings per share (EPS)	0.25
Gross Margin	49.13%
Net Profit Margin	9.45%
Debt/Equity Ratio	9.2%

How did PETS perform over the long term?

See historical performance and comparison

Dividends

3.7%

Current Dividend Yield

47%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is PETS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PETS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PETS. This is calculated by dividing PETS's market cap by their current preferred multiple.
What is PETS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	UK£1.57b

PETS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	1.4x
Enterprise Value/EBITDA	11x
PEG Ratio	3.6x

Price to Earnings Ratio vs Peers

How does PETS's PE Ratio compare to its peers?

PETS PE Ratio vs Peers

The above table shows the PE ratio for PETS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	18.1x
WOSG Watches of Switzerland Group	26.3x	19.9%	UK£1.9b
JD. JD Sports Fashion	16.2x	20.1%	UK£6.0b
CARD Card Factory	20x	38.6%	UK£161.8m
G4M Gear4music (Holdings)	10.1x	17.6%	UK£37.8m
PETS at Home Group	12.6x	3.5%	UK£1.6b

Forward PE

Price-To-Earnings vs Peers: PETS is good value based on its Price-To-Earnings Ratio (12.6x) compared to the peer average (18.1x).

Price to Earnings Ratio vs Industry

How does PETS's PE Ratio compare vs other companies in the GB Specialty Retail Industry?

Price-To-Earnings vs Industry: PETS is expensive based on its Price-To-Earnings Ratio (12.6x) compared to the UK Specialty Retail industry average (8x)

Price to Earnings Ratio vs Fair Ratio

What is PETS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PETS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.6x
Fair PE Ratio	13.9x

Price-To-Earnings vs Fair Ratio: PETS is good value based on its Price-To-Earnings Ratio (12.6x) compared to the estimated Fair Price-To-Earnings Ratio (13.9x).

Share Price vs Fair Value

What is the Fair Price of PETS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PETS (£3.17) is trading below our estimate of fair value (£6.05)

Significantly Below Fair Value: PETS is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: PETS is poor value based on its PEG Ratio (3.6x)

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Future Growth

How is at Home Group forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

3.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PETS's forecast earnings growth (3.5% per year) is above the savings rate (0.9%).

Earnings vs Market: PETS's earnings (3.5% per year) are forecast to grow slower than the UK market (11% per year).

High Growth Earnings: PETS's earnings are forecast to grow, but not significantly.

Revenue vs Market: PETS's revenue (4.4% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: PETS's revenue (4.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: PETS's Return on Equity is forecast to be low in 3 years time (12.5%).

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Past Performance

How has at Home Group performed over the past 5 years?

Past Performance Score

4/6

Past Performance Score 4/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PETS has high quality earnings.

Growing Profit Margin: PETS's current net profit margins (9.4%) are higher than last year (8%).

Past Earnings Growth Analysis

Earnings Trend: PETS's earnings have grown by 16.8% per year over the past 5 years.

Accelerating Growth: PETS's earnings growth over the past year (35.9%) exceeds its 5-year average (16.8% per year).

Earnings vs Industry: PETS earnings growth over the past year (35.9%) underperformed the Specialty Retail industry 46.2%.

Return on Equity

High ROE: PETS's Return on Equity (11.9%) is considered low.

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Financial Health

How is at Home Group's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: PETS's short term assets (£317.4M) exceed its short term liabilities (£309.6M).

Long Term Liabilities: PETS's short term assets (£317.4M) do not cover its long term liabilities (£408.3M).

Debt to Equity History and Analysis

Debt Level: PETS has more cash than its total debt.

Reducing Debt: PETS's debt to equity ratio has reduced from 23.8% to 9.2% over the past 5 years.

Debt Coverage: PETS's debt is well covered by operating cash flow (256%).

Interest Coverage: PETS's interest payments on its debt are well covered by EBIT (9.6x coverage).

Balance Sheet

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Dividend

What is at Home Group current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.73%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PETS's dividend (3.73%) is higher than the bottom 25% of dividend payers in the UK market (1.86%).

High Dividend: PETS's dividend (3.73%) is low compared to the top 25% of dividend payers in the UK market (5.17%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, PETS has been paying a dividend for less than 10 years.

Growing Dividend: PETS's dividend payments have increased, but the company has only paid a dividend for 8 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (47.4%), PETS's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (30.4%), PETS's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure

CEO

Lyssa McGowan

no data

Tenure

Ms. Lyssa R. McGowan is Group Chief Executive Officer of Pets at Home Group Plc from June 1, 2022 and serves as Director from April 25, 2022. She is Chief Consumer Officer at Sky UK, responsible for the TV...

Leadership Team

Experienced Management: PETS's management team is considered experienced (3.4 years average tenure).

Board Members

Experienced Board: PETS's board of directors are considered experienced (4.5 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: PETS insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/29 00:00
End of Day Share Price	2022/06/29 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31