PetMed Express, Inc. — financial distress indicators
Financial-health summary
PetMed Express, Inc.'s reported numbers place it in the 'Weak' financial-health band (distress score 64/100). The main indicators are cash runway under 12 months, revenue collapse and ohlson o-score signals likely failure. Independently, the Ohlson accounting model puts its 1-year failure probability at 99% and the market-implied (Merton) default probability is 0.0%. In its favour: cash on hand covers all debt (net-cash balance sheet).
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
At the current free-cash-flow burn, cash covers ~8 months.
Going-concern standard: management must assess ability to continue for 12 months (ASC 205-40). Runway below that horizon forces dilution, asset sales or default.
Revenue changed -35% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
O-score 5.09 → model probability 99%.
Ohlson (1980) logit model of 1-year corporate failure; O > 0 (p > 50%) is the original failure cut-off.
Current ratio is 0.84.
Short-term obligations exceed short-term resources — the company relies on rolling over credit.
Recurring net losses.
Repeated losses are a core input in both Ohlson and Altman failure models.
Price is -67% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Operating margin fell from -1% to -18% in two years.
Sharp margin compression signals loss of pricing power or cost control.
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- Cash on hand covers all debt (net-cash balance sheet).
📰 Recent news scan
- PetMeds Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)Yahoo Finance · 2026-10-02
- PetMeds Enhances Board of Directors with Appointment of Tamar Elkeles as New Independent DirectorYahoo Finance · 2026-09-21
- PetMed Express (PETS) Q1 2027 Earnings Call TranscriptYahoo Finance · 2026-08-20
- PetMed Express Q1 Earnings Miss Estimates, Sales Decline Y/YYahoo Finance · 2026-08-14
- PetMed Express Inc (PETS) (Q1 2027) Earnings Call Highlights: Narrowing Losses and Strategic ...Yahoo Finance · 2026-08-14
- PetMeds® Announces First Quarter Financial ResultsYahoo Finance · 2026-08-13
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do PetMed Express, Inc.'s financial-health indicators show?
As of 2026-10-08, PetMed Express, Inc.'s public financial data places it in the 'Weak' band with a distress score of 64/100, driven by cash runway under 12 months, revenue collapse and ohlson o-score signals likely failure. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is PetMed Express, Inc.'s financial distress score?
64/100 ('Weak'). Ohlson O-score 5.09 (model 1-year failure probability 99%). Merton distance-to-default 4.39 σ (model default probability 0.0%).
What works in PetMed Express, Inc.'s favour?
Cash on hand covers all debt (net-cash balance sheet).
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
Other Pharma & Biotech companies with distress indicators
- ABVC BioPharma, Inc. (ABVC)Very weak 100/100
- AKAN (AKAN)Very weak 100/100
- Endovia Health Sciences, Inc. (EDVA)Very weak 100/100
- Elicio Therapeutics, Inc. (ELTX)Very weak 100/100
- IM Cannabis Corp. (IMCC)Very weak 100/100
- NeuroSense Therapeutics Ltd. (NRSN)Very weak 100/100
Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.