Patterson Companies, Inc. (PDCO)
Patterson Companies, Inc. is a distributor of dental and animal health products, operating in the United States, the United Kingdom, and Canada. The company serves dentists, veterinarians, and other healthcare professionals with a wide range of products and services.
Company Overview
Patterson Companies offers a compelling investment opportunity through its established distribution network in the dental and animal health sectors, driven by practice optimization solutions and a robust private label portfolio, positioning it for sustained growth in fragmented markets despite a high P/E ratio of 47.68.
Investment Thesis
Patterson Companies presents a compelling investment opportunity due to its established market position in the growing dental and animal health industries. The company's focus on value-added services, such as practice optimization solutions and private label products, enhances customer loyalty and drives recurring revenue. While the company's profit margin is relatively low at 1.8%, there is opportunity for margin expansion through operational efficiencies and strategic pricing initiatives. The company's beta of 0.72 suggests lower volatility compared to the broader market. Key catalysts include the increasing demand for dental and animal health products and services, as well as the company's ability to capitalize on market consolidation opportunities. Investors should consider PDCO for its stability and potential for long-term growth in essential healthcare sectors.
Key Highlights
- Market capitalization of $2.77 billion reflects a substantial presence in the dental and animal health distribution market.
- P/E ratio of 47.68 indicates that the stock is trading at a premium compared to its earnings, suggesting investor expectations of future growth.
- Gross margin of 20.0% demonstrates the company's ability to generate revenue after accounting for the cost of goods sold.
- Beta of 0.72 suggests that the stock is less volatile than the overall market, offering a degree of stability to investors.
- Patterson Companies operates in the United States, the United Kingdom, and Canada, providing geographic diversification and access to multiple markets.
Competitors
Strengths
- Established market position in dental and animal health distribution.
- Comprehensive product portfolio and value-added services.
- Strong relationships with suppliers and customers.
- Geographic diversification across the United States, the United Kingdom, and Canada.
Weaknesses
- Relatively low profit margin of 1.8%.
- High P/E ratio of 47.68 may indicate overvaluation.
- Dependence on the dental and animal health markets.
- Potential for disruption from online retailers and direct-to-consumer models.
Catalysts
- Ongoing: Increasing demand for dental and animal health products and services.
- Ongoing: Expansion of the company's private label brands.
- Upcoming: Potential acquisitions of smaller distributors to expand market share.
- Ongoing: Implementation of new technologies to improve efficiency and customer experience.
Risks
- Potential: Economic downturns affecting healthcare spending.
- Potential: Increased competition from online retailers and direct-to-consumer models.
- Potential: Changes in regulations and healthcare policies.
- Ongoing: Supply chain disruptions and inflationary pressures.
- Potential: Product liability claims related to distributed products.
Growth Opportunities
- Growth opportunity 1: Expansion of Practice Optimization Solutions: Patterson can drive growth by expanding its suite of practice optimization solutions, including practice management software, e-commerce platforms, and revenue cycle management tools. This market is projected to reach $10 billion by 2028, offering a significant opportunity for Patterson to increase its market share. By providing integrated solutions that improve efficiency and profitability for dental and veterinary practices, Patterson can enhance customer loyalty and generate recurring revenue.
- Growth opportunity 2: Strategic Acquisitions and Partnerships: Patterson can pursue strategic acquisitions and partnerships to expand its product portfolio and geographic reach. The fragmented nature of the dental and animal health distribution markets presents opportunities to consolidate smaller players and gain access to new markets. By acquiring companies with complementary products or services, Patterson can strengthen its competitive position and accelerate growth. This strategy could yield a 10-15% increase in revenue over the next three years.
- Growth opportunity 3: Penetration of Private Label Brands: Patterson can increase sales of its private label brands, such as Aspen, First Companion, and Patterson Veterinary, which offer higher margins compared to branded products. By promoting these brands through targeted marketing campaigns and offering competitive pricing, Patterson can capture a larger share of the market. The private label market in animal health is expected to grow by 8% annually, providing a favorable environment for Patterson's private label strategy.
- Growth opportunity 4: Leveraging Data Analytics: Patterson can leverage data analytics to improve its supply chain management, optimize pricing, and personalize customer interactions. By analyzing sales data, customer preferences, and market trends, Patterson can make more informed decisions and improve its operational efficiency. This can lead to a reduction in inventory costs and an increase in customer satisfaction, driving revenue growth and profitability. The implementation of advanced analytics could improve operational efficiency by 5% within two years.
- Growth opportunity 5: Expansion into Emerging Markets: Patterson can explore opportunities to expand its operations into emerging markets with growing dental and animal health sectors. These markets offer significant growth potential due to increasing disposable incomes and rising awareness of healthcare. By establishing a presence in these markets through partnerships or acquisitions, Patterson can diversify its revenue streams and reduce its reliance on mature markets. Expansion into select emerging markets could contribute an additional 5% to revenue growth over the next five years.
Opportunities
- Expansion of practice optimization solutions.
- Strategic acquisitions and partnerships.
- Penetration of private label brands.
- Leveraging data analytics to improve efficiency and customer experience.
Threats
- Intense competition from other distributors and manufacturers.
- Economic downturns affecting healthcare spending.
- Changes in regulations and healthcare policies.
- Supply chain disruptions and inflationary pressures.
Competitive Advantages
- Established distribution network in the dental and animal health markets.
- Strong relationships with suppliers and customers.
- Comprehensive product portfolio and value-added services.
- Private label brands offering higher margins.
About
Founded in 1877 and headquartered in Saint Paul, Minnesota, Patterson Companies, Inc. has evolved from a dental supply company to a diversified distributor of dental and animal health products across the United States, the United Kingdom, and Canada. Originally known as Patterson Dental Company, the company rebranded in 2004 to reflect its expanded scope. Patterson operates through three segments: Dental, Animal Health, and Corporate. The Dental segment provides consumable products, technology and equipment, and practice optimization solutions, including software, e-commerce, and revenue cycle management. The Animal Health segment offers biologicals, pharmaceuticals, vaccines, diagnostics, diets, supplies, equipment, and software, along with value-added services. The Corporate segment provides customer financing. Patterson serves a diverse customer base, including dentists, veterinarians, laboratories, institutions, and animal health product retailers. With a comprehensive product portfolio and a focus on value-added services, Patterson Companies maintains a strong position in the dental and animal health distribution markets, navigating competitive pressures through strategic partnerships and a commitment to customer satisfaction.
What They Do
- Distributes dental consumable products like infection control and restorative materials.
- Provides dental technology and equipment, including basic and advanced systems.
- Offers practice optimization solutions such as practice management software and e-commerce.
- Distributes animal health products including pharmaceuticals, vaccines, and diagnostics.
- Supplies equipment and software to veterinary and animal health professionals.
- Offers value-added services like software and design, maintenance and repair, and equipment financing.
- Provides private label products under the Aspen, First Companion, and Patterson Veterinary brands.
Business Model
- Generates revenue through the sale of dental and animal health products.
- Provides value-added services such as software, maintenance, and financing.
- Distributes products through a direct sales force and online channels.
Industry Context
Patterson Companies operates within the dental and animal health distribution industries, which are characterized by steady growth driven by increasing healthcare spending and pet ownership. The market is fragmented, with a mix of large distributors and smaller regional players. Patterson competes with companies like American Medical Depot (AMED), which also distributes medical supplies. The industry is also influenced by technological advancements, such as digital dentistry and telemedicine for animals, creating opportunities for companies that can adapt and offer innovative solutions. The company's focus on practice optimization solutions positions it well to capitalize on the trend towards technology adoption in healthcare practices.
Key Customers
- Dentists and dental laboratories.
- Veterinarians and animal health professionals.
- Institutions and healthcare facilities.
- Production animal operators and animal health product retailers.
Financials
Recent Quarterly Results
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2025 | $1.57B | $31M | $0.35 |
| Q4 2024 | $1.67B | $27M | $0.30 |
| Q3 2024 | $1.54B | $14M | $0.15 |
| Q2 2024 | $1.72B | $67M | $0.74 |
Source: Company filings
Chart & Info
Price Chart
Patterson Companies, Inc. (PDCO) stock price: $31.33 (-0.28, -0.90%)
Why Bull
- •Recent insider buying suggests confidence in the company's future prospects, indicating that key stakeholders believe in its growth potential.
- •Community sentiment has shifted positively, with discussions highlighting improved operational efficiency and potential market expansion.
- •Analysts have noted a strengthening demand for dental products, which aligns with PDCO's core offerings and may drive revenue growth.
- •The company's efforts in diversifying its product line have been well-received, positioning it favorably against competitors.
Why Bear
- •Concerns about rising operational costs have been voiced in the community, which could impact profitability in the near term.
- •Bearish sentiment has emerged regarding potential supply chain disruptions, which may hinder product availability and sales.
- •Recent negative media coverage surrounding industry regulations has led to uncertainty about future compliance costs for PDCO.
- •Some analysts believe that market competition is intensifying, which could pressure PDCO's market share and margins.
Latest News
-
This Analyst Predicts $700 For Broadcom, Plus RBC Capital Slashes PT On This Stock By 85%
benzinga · Sep 2, 2022
-
Benzinga's Top Ratings Upgrades, Downgrades For June 17, 2021
· Jun 17, 2021
-
Stocks That Hit 52-Week Highs On Friday
· May 7, 2021
-
Stocks That Hit 52-Week Highs On Wednesday
· Jan 27, 2021
Technical Analysis
Rationale
AI-generated technical analysis for PDCO including trend direction, momentum, and pattern recognition.
What to Watch
Key support and resistance levels, volume signals, and upcoming events.
Risk Management
Position sizing, stop-loss levels, and risk-reward assessment.
Community
Discussion
Share your analysis and discuss Patterson Companies, Inc. (PDCO) with other investors. Log in to post.
Sentiment
Community sentiment and discussion activity for PDCO.
Make a Prediction
Set your price target for Patterson Companies, Inc. (PDCO), choose a timeframe, and track your prediction accuracy.
Current price: $31.33
Analyst Consensus
Consensus Rating
Aggregated Buy/Hold/Sell recommendations from Benzinga, Yahoo Finance, and Finnhub for PDCO.
Price Targets
Wall Street price target analysis for PDCO.
Insider Flow (30d)
No insider trades in the last 30 days.
MoonshotScore
Score Factors
-
Revenue Growth 5/100
Revenue growth data is currently unavailable for this company.
-
Gross Margin 5/100
Gross margin data is currently unavailable for this company.
-
Operating Leverage 4/100
Limited operating leverage due to slower revenue growth, keeping profit scaling constrained.
-
Cash Runway 5/100
Cash position data is currently unavailable for this company.
-
R&D Intensity 5/100
R&D spending data is currently unavailable for this company.
-
Insider Activity 6/100
No significant insider buying or selling recently, which is neutral for the stock outlook.
-
Short Interest 5/100
Float and volume data unavailable for liquidity analysis.
-
Price Momentum 0/100
No bullish technical signals detected. The stock lacks upward price momentum currently.
-
News Sentiment 5/100
No sentiment data available
What does this score mean?
The MoonshotScore rates PDCO's growth potential on a scale of 0-100 across multiple factors including innovation, market disruption, financial health, and momentum.
Competitors & Peers
Latest News
This Analyst Predicts $700 For Broadcom, Plus RBC Capital Slashes PT On This Stock By 85%
Benzinga's Top Ratings Upgrades, Downgrades For June 17, 2021
Stocks That Hit 52-Week Highs On Friday
Stocks That Hit 52-Week Highs On Wednesday
Frequently Asked Questions
What does Patterson Companies, Inc. do?
Patterson Companies, Inc. is a distributor of dental and animal health products, operating primarily in the United States, the United Kingdom, and Canada. The company provides a comprehensive range of products, including consumables, equipment, and software, as well as value-added services such as practice optimization solutions and equipment repair. They serve dentists, veterinarians, laboratories, and other healthcare professionals, offering a one-stop shop for their essential supplies and services. Patterson's business model revolves around efficient distribution and strong customer relationships.
Is PDCO stock a good buy?
PDCO stock presents a mixed investment picture. While the company operates in stable and growing markets (dental and animal health), its high P/E ratio of 47.68 suggests that the stock may be overvalued. The company's low profit margin of 1.8% is also a concern. However, Patterson's established market position, comprehensive product portfolio, and focus on value-added services are positive factors. Investors should carefully consider the valuation and growth potential before investing. Monitor upcoming earnings reports for signs of margin improvement.
What are the main risks for PDCO?
Patterson Companies faces several risks, including economic downturns that could reduce healthcare spending, increased competition from online retailers and direct-to-consumer models, and changes in regulations and healthcare policies. Supply chain disruptions and inflationary pressures could also negatively impact the company's profitability. Additionally, product liability claims related to distributed products pose a potential risk. Investors should be aware of these risks and monitor the company's ability to mitigate them.
Is PDCO a good stock to buy?
Whether PDCO is a good investment depends on your financial goals, risk tolerance, and investment horizon. Key factors to evaluate include the company's revenue growth trajectory, profit margins, debt-to-equity ratio, competitive moat, and valuation multiples (P/E, P/S, EV/EBITDA) relative to industry peers. Our AI-generated Investment Thesis and SWOT analysis on this page provide a data-driven starting point. Always do your own research and consider consulting a financial advisor before making investment decisions.
What is the PDCO MoonshotScore?
The MoonshotScore for PDCO is an AI-powered rating from 0 to 100 that evaluates a stock across four dimensions: growth potential (revenue and earnings trajectory), financial health (balance sheet strength, cash flow), market momentum (price trends, volume patterns, institutional flows), and risk factors (volatility, debt levels, sector headwinds). Scores above 70 indicate strong potential, 50-70 moderate, and below 50 suggests caution. The score is recalculated daily using the latest financial data and market signals.
How often is PDCO data updated?
PDCO stock prices are updated in real-time during U.S. market hours (9:30 AM - 4:00 PM ET, Monday through Friday). After-hours and pre-market prices are also tracked. Company fundamentals (earnings, revenue, balance sheet) are refreshed when new quarterly or annual reports are filed. Analyst ratings, price targets, and AI-generated insights are updated daily. Breaking news related to PDCO is aggregated continuously from premium financial news sources throughout the day.
What are the growth catalysts for PDCO?
Growth catalysts for Patterson Companies, Inc. (PDCO) can include several categories: product catalysts (new launches, FDA approvals, patent grants), financial catalysts (earnings beats, margin expansion, share buybacks), strategic catalysts (acquisitions, partnerships, market expansion into new regions), and macro catalysts (favorable regulation, industry tailwinds, secular growth trends). Our AI analyzes Patterson Companies, Inc.'s specific catalysts using earnings transcripts, SEC filings, and news sentiment to identify the most impactful near-term and long-term drivers.
Who are PDCO's main competitors?
Patterson Companies, Inc. (PDCO) competes with companies in its industry that target similar customers, markets, or product categories. Competitor analysis involves comparing key metrics: market share, revenue growth rates, profit margins, R&D spending, and valuation multiples. Understanding competitive positioning helps investors assess whether PDCO has a sustainable competitive advantage (moat) through brand strength, network effects, cost leadership, or switching costs. Our Competitors section provides a side-by-side comparison with relevant peers.
What do analysts say about PDCO?
Wall Street analyst coverage for PDCO includes consensus ratings (buy, hold, or sell), 12-month price targets, and earnings estimates. Analyst opinions are aggregated from major investment banks and research firms. Key metrics to watch include the consensus price target (average, high, and low estimates), the number of analysts covering the stock, any recent rating changes (upgrades or downgrades), and how actual earnings compare to analyst estimates (beat or miss history). Our platform aggregates these from multiple data providers for a comprehensive view.
What is PDCO's market cap?
Market capitalization (market cap) for PDCO is calculated by multiplying the current share price by the total number of outstanding shares. It represents the market's total valuation of the company. Stocks are typically categorized as mega-cap ($200B+), large-cap ($10B-$200B), mid-cap ($2B-$10B), small-cap ($300M-$2B), or micro-cap (under $300M). Market cap influences index inclusion, institutional ownership eligibility, and risk profile. Our Key Statistics section shows PDCO's current market cap alongside enterprise value and other valuation metrics.
How has PDCO stock performed recently?
PDCO's recent stock performance can be evaluated across multiple timeframes: daily price changes, week-over-week momentum, monthly trends, and year-to-date returns. Important performance indicators include the stock's 52-week high and low, moving averages (50-day and 200-day SMA), relative strength index (RSI), and volume trends. Comparing PDCO's performance against its sector index and the S&P 500 provides context on whether it is outperforming or underperforming the broader market.
What are the risks of investing in PDCO?
Key risk categories for PDCO include: market risk (overall market downturns affecting stock prices), company-specific risk (management changes, product failures, competitive threats), financial risk (high debt levels, cash burn, dilution from stock issuance), regulatory risk (government policy changes, lawsuits, compliance issues), and macroeconomic risk (interest rate changes, inflation, currency fluctuations). Beta measures PDCO's volatility relative to the market - a beta above 1.0 means higher volatility than the S&P 500. Our AI-generated risk assessment identifies the most relevant risk factors for this specific stock.
Are insiders buying or selling PDCO?
Insider trading activity for PDCO tracks purchases and sales by company executives, directors, and major shareholders (10%+ owners) as reported in SEC Form 4 filings. Insider buying is generally considered a bullish signal because insiders have the deepest knowledge of company operations, while selling may have various motivations (diversification, tax planning, pre-planned 10b5-1 trading plans). Key metrics include the buy-to-sell ratio, total dollar value of insider transactions, and whether multiple insiders are trading in the same direction. Our Insider Flow tab shows recent transactions with dates and dollar amounts.
Is PDCO a good stock for beginners?
Patterson Companies, Inc. (PDCO) can be suitable for beginner investors depending on several factors. Look at the MoonshotScore on this page for an overall AI-powered assessment of growth potential and risk. Beginners should also check the company's market cap (larger companies tend to be less volatile), gross margin (higher margins mean stronger business fundamentals), and cash position (healthy cash reduces bankruptcy risk). Always start with a small position size and never invest money you cannot afford to lose.
How risky is PDCO for first-time investors?
Every stock carries risk, including Patterson Companies, Inc. (PDCO). First-time investors should review the Risk Factors section on this page for company-specific risks. Key risk indicators include price volatility (check the chart for daily swings), insider selling activity (see Insider Flow tab), and cash runway (see MoonshotScore breakdown). A diversified portfolio with an index fund like the S&P 500 as a core holding is generally recommended before adding individual stocks like PDCO.
Disclaimer: This content is for informational purposes only and does not constitute investment advice. Always do your own research and consult a financial advisor.
Data provided for informational purposes only.
- Stock data pending update. Financial data as of last reporting period.