Why Patterson Companies Stock Is Plunging Today

Core Insights - Patterson Companies experienced a significant decline in share price following its fiscal 2025 Q1 update, with shares dropping 15.1% [1] - The company reported Q1 revenue of $1.54 billion, a decrease of 2.2% year over year, falling short of analyst expectations of $1.59 billion [1][2] - Q1 earnings per share were reported at $0.15 based on GAAP, with adjusted earnings per share at $0.24, which was below the consensus estimate of $0.32 [2] Revenue and Earnings Performance - The revenue for Q1 was $1.54 billion, down from the previous year, indicating a negative trend in sales performance [1] - The adjusted earnings per share of $0.24 was significantly lower than the expected $0.32, reflecting challenges in profitability [2] Factors Contributing to Disappointing Results - The CEO attributed the disappointing results to the impact of a cybersecurity attack on Change Healthcare, which created a backlog of unpaid claims affecting many healthcare companies [3] - Additionally, the companion animal business faced lower sales, with consumables and equipment sales declining by 3% and 3.8% year over year, respectively [4] - Timing of certain corporate expenses also played a role in the lower-than-expected results [4] Future Outlook and Investment Considerations - Despite the disappointing Q1 results, Patterson reaffirmed its full-year earnings guidance, suggesting confidence in future performance [5] - The stock is considered undervalued with a forward price-to-earnings ratio of 10.8 and a forward dividend yield exceeding 4%, making it an attractive option for value and income investors [5]