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  "documentTitle": "PetIQ, Inc. (PETQ)",
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      "text": "Valuing PETQ shares on-par with – or even at a slight premium to – peers in the pharmaceutical distribution and pet care spaces yields 75-90% downside to current levels.",
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      "text": "downside: -74% to -93%",
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      "text": "Valuing PETQ shares on-par with – or even at a slight premium to – peers in the pharmaceutical distribution and pet care spaces yields 75-90% downside to current levels. We believe that such a valuation could in fact be generous, as PetIQ's rebate-driven earnings are of particularly low quality, and as changes to the veterinary pharmaceutical supply chain should pressure PetIQ's product gross margins. Accordingly, PETQ shares could deserve a materially below-average multiple given the downside risks to Company earnings.",
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      "text": "Even taking management's implied product sales guidance as given, we see 8% downside to management's total FY20 sales guidance due to disappointing wellness center performance. We also see downside to pre-adjustment EBITDA against the Street's overly-optimistic view of product gross margins: even assuming segment GM expansion to 17% in our bull case, we see 40% downside to pre-adjustment EBITDA, and 60% downside assuming flat segment GMs. Once management's likely FY20 EBITDA adjustments are taken into account – which we believe should not be applied to EBITDA – we see 47-65% downside to management's implied FY20 Adjusted EBITDA.",
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