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  "documentTitle": "PetIQ, Inc. (PETQ)",
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  "presentationDate": "2019-04-30 00:00:00",
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  "notes": "The slide uses a side-by-side table to contrast two different valuation methodologies for PetIQ's wellness centers.",
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      "text": "We believe that the Merial-based estimate is most applicable to PetIQ, given that pet owners cannot take their pets into Walmart, making PetIQ wellness centers more like stand-alone wellness centers than Banfield’s in-store clinics.",
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      "text": "Revenue per PetIQ Clinic per Year: $192,000",
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      "text": "We believe that PetIQ is using Banfield Pet Hospitals – a division of Mars, Inc. – as a benchmark for wellness center unit economics estimates. The sell-side suggests that Banfield clinics, many of which are located in PetSmart stores, earn $600-800K in revenue annually (~$850M in sales across “more than 1,000 hospitals”). However, for reasons given earlier, we believe that Banfield is not a good proxy for PetIQ’s wellness centers: whereas pet owners can bring their pets into PetSmart locations, allowing them to shop for their pets and take them to the vet in a single trip, pet owners cannot take their pets into Walmart stores, forcing them to make separate trips for their normal shopping and for taking their pets to VetIQ. Accordingly, we believe that PetIQ wellness centers are more similar to stand-alone clinics, which, per Merial, see ~2,000 animals per vet per year – implying just ~$125K in sales per vet on an average ticket of $64 (per management’s Apr 2018 modeling call). Further, as of Oct 2015, Banfield employed “more than 3,200 veterinarians,” implying an average of over 3 veterinarians per clinic – and, accordingly, revenue per veterinarian of just $200-250K, closer to Merial’s single-veterinarian clinic revenue estimates than PetIQ’s. We believe that PetIQ wellness centers – most of which, per management, will employ just one veterinarian – will see revenue closer to these levels.",
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      "text": "1. Source: Hoovers, but contradicted by another Hoovers report?, 2. Source: Banfield.com, 3. Source. Assuming one veterinarian per clinic, 4. Source: Bloomberg, 5. Source",
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      "text": "Are Wellness Center Unit Economics Being Modeled Appropriately?",
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