Shares of Patterson Companies Inc (PDCO) attained a new 52-week high of $50.46 on Jan 9, eventually closing at $50.43. This represents a strong one-year return of about 23.2%. The S&P 500 jumped almost 11% during the same period.
The bullish run reflects a strong product portfolio driven by strategic acquisitions and partnerships. The expanding product portfolio has helped Patterson post solid results in the recent past.
We note that the company has outperformed the Zacks Consensus Estimate by an average of 0.6% in the last four quarters. Meanwhile, this Zacks Rank #2 (Buy) stock has a market cap of $5.20 billion and a long-term expected earnings growth rate of 10.40%.
Key Growth Catalysts
Patterson’s expanding product portfolio is a key growth catalyst in our view. The company is planning to integrate technology offerings like chairside CAD/CAM, with multiple core equipment platforms such as chairs, units and cabinetry.
Also, the company is set to launch products from Sirona Dental (SIRO) in the North American market, which will further boost customer base in the near term.
Strategic acquisitions and partnerships are playing a major role in expanding Patterson’s product portfolio. We believe that the takeover of Holt Dental Supply will expand Patterson Dental’s local reach while also enhancing its Midwest presence.
Moreover, strategic collaborations with Quality Systems (QSII), Abaxis (ABAX), A-dec, DentalEZ, Planmeca, Proma and others will further drive its market share in the dental and veterinary division in the long run.
Estimate Revisions
The Zacks Consensus Estimate for 2015 has remained steady at $2.29 per share over the past 7 days, which reflects 9.2% year-over-year growth. Similarly, the consensus estimate for fiscal 2016 has remained stable at $2.49 over the same period, which highlights 8.6% year-over-year growth.
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