PLANO, Texas, June 18, 2021 /PRNewswire/ -- Argus Research, an
independent investment research firm, continues its Equity Research
Report coverage on Dogness (International) Corporation
(NasdaqGM: DOGZ).
Click here to view Full Argus Report
Highlights, as conveyed by Argus Analyst Steve Silver, include:
COMPANY HIGHLIGHTS
- DOGZ: A leading developer and manufacturer of a comprehensive
line of Dogness-branded, OEM, and private-label pet products, with
a record of innovation in the smart tech segment and a strong
distribution network.
- In our view, Dogness' successful execution of its business plan
led the company back to profitability during the first half of
fiscal 2021, which ended on December 31,
2020. Dogness benefitted from a surge in demand related to
increased pet ownership during the COVID-19 pandemic and increased
momentum for its core product line, led by growing demand for smart
pet products. Dogness continues to see strong product demand,
particularly from its smart tech portfolio, and has expanded
availability across multiple sales channels, including online,
specialty stores, big box warehouse clubs, and general retail.
- We expect this momentum, which was evident during the 2020
holiday season, to continue, driven by new and expanding
partnerships with leading U.S. retailers including Target, Costco,
and Petco. We also believe that favorable industry tailwinds
(accelerated by people spending more time at home and adopting new
pets during COVID-19) and the company's leadership in the
faster-growing pet tech and smart pet product segments have
contributed to the strong consumer demand.
- Dogness reported 7% revenue growth for the first half of fiscal
2021, reversing a negative trend seen since 2019, with growth in
both the U.S. and domestic China
market. Smart pet product sales increased 60% over the same
year-ago period, and accounted for 27.6% of total revenue, compared
to 18.4% in the comparable period in fiscal 2020, and 22.6% for the
full 2020 fiscal year. As a result, gross margin for the first half
of fiscal 2021 rose to 39%, levels not seen since 2018. Thus, we
expect Dogness to continue its evolution into a higher-margin
technology-focused pet product company with a diversified global
footprint, and to capitalize on favorable long-term global trends
in the pet care industry as pet owners return to offices and
require mobile pet monitoring and care.
- As of December 31, 2020, Dogness
had $2.3 million in cash and
short-term investments on its balance sheet. Subsequently, the
company raised $7.4 million in gross
proceeds from an equity and warrant offering in January 2021. With its favorable outlook for
sustained positive operational cash flow, we believe the company is
capitalized sufficiently to execute on its business plan and build
value for the company and shareholders.
- DOGZ shares are trading at roughly 7-times our EPS estimate of
$0.27 for fiscal 2022. This forward
multiple represents a steep discount to the average forward
multiple of roughly 24-times for the S&P Small Cap 600 and the
Russell 2000 benchmarks. In our view, the current valuation does
not reflect Dogness' recent positive financial results, its
strengthened balance sheet, growth initiatives, or continued
favorable market trends. As such, we view the shares as having
upside and, based on our forward P/E analysis, a fair value of
$6.00.
INVESTMENT THESIS (click here to view
full Argus Equity Research Report & Investment Thesis)
About Argus Research Corp.
Headquartered in NYC, Argus Research (www.argusresearch.com) is
a leading independent equity research firm (est. 1934) providing
fundamental and quantitative research coverage on more than 1,500
companies across all 11 sectors of the S&P 500, as well as
macroeconomic and equity market forecasts, thematic research, model
portfolios and pre-IPO research. In addition, Argus has recently
committed to providing a sponsored research solution for small
& mid-cap companies seeking coverage. Argus's Asset Management,
Bank Trust, sell-side advisor and self-directed investor clients
value Argus's proprietary equity research methodology, analysis and
commentary. Argus's Equity Research/earnings estimates are
available on major research / earnings estimate aggregator
platforms, including Bloomberg, Thomson Reuters, Factset and
S&P Global.
About Dogness
Dogness (International) Corporation was founded in 2003 from the
belief that dogs and cats are important, well-loved family members.
Through its smart products, hygiene products, health and wellness
products, and leash products, Dogness' technology simplifies pet
lifestyles and enhances the relationship between pets and pet
caregivers. The Company ensures industry-leading quality through
its fully integrated vertical supply chain and world-class research
and development capabilities, which has resulted in over 200
patents and patents pending. Dogness products reach families
worldwide through global chain stores and distributors. For more
information, please visit: ir.dogness.com.
Forward Looking Statements
No statement made in this press release should be interpreted as
an offer to purchase or sell any security. Such an offer can only
be made in accordance with the Securities Act of 1933, as amended,
and applicable state securities laws. Certain statements in this
press release concerning our future growth prospects are
forward-looking statements regarding our future business
expectations intended to qualify for the "safe harbor" under the
Private Securities Litigation Reform Act of 1995, which involve a
number of risks and uncertainties that could cause actual results
to differ materially from those in such forward-looking statements.
The risks and uncertainties relating to these statements include,
but are not limited to, risks and uncertainties regarding lingering
effects of the COVID-19 pandemic on our customers' businesses and
end purchasers' disposable income, our cooperation with telecom
companies to secure 4G coverage, our ability to meet development,
production and shipping targets, our ability to raise capital on
any particular terms, fulfillment of customer orders, fluctuations
in earnings, fluctuations in foreign exchange rates, our ability to
manage growth, our ability to realize revenue from expanded
operation and acquired assets in China and the U.S., our ability to attract and
retain highly skilled professionals, client concentration, industry
segment concentration, reduced demand for technology in our key
focus areas, our ability to successfully complete and integrate
potential acquisitions, and unauthorized use of our intellectual
property and general economic conditions affecting our industry.
Additional risks that could affect our future operating results are
more fully described in our United States Securities and
Exchange Commission filings. These filings are available at
www.sec.gov. Dogness may, from time to time, make additional
written and oral forward-looking statements, including statements
contained in the Company's filings with the Securities and Exchange
Commission and our reports to shareholders. In addition, please
note that any forward-looking statements contained herein are based
on assumptions that we believe to be reasonable as of the date of
this press release. The Company does not undertake to update any
forward-looking statements that may be made from time to time by or
on behalf of the Company unless it is required by law.
Argus Research Co. has received a flat fee from Dogness as part
of a Sponsored Research agreement between Argus and the company. No
part of Argus Research's compensation is directly or indirectly
related to the content of this assessment or to other opinions
expressed in this report. Please refer to the full Argus report and
the disclaimer for complete disclosures.
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SOURCE Dogness International Corporation