We recently compiled a list of the 10 Best Pet Stocks To Invest In According to Analysts. In this article, we are going to take a look at where BARK Inc. (NYSE:BARK) stands against the other pet stocks.
Pet Industry at a Glance
The pet industry is a rapidly growing sector. It was valued at approximately $320 billion in 2023 and is projected to reach nearly $500 billion by 2030, according to Bloomberg Intelligence’s Pet Economy Report. This growth is driven by a rising global pet population and an increasing trend of pet humanization, where owners treat pets as family members and are willing to spend more on their care, including premium food and health services.
The report notes that the US is positioned to remain the largest pet market. In the United States, the market is expected to approach $200 billion by 2030, with significant spending on veterinary care and pet healthcare products.
Ann-Hunter Van Kirk, Bloomberg Intelligence Senior Biopharmaceutical Analyst and co-author of the report, noted that improved pet nutrition is contributing to longer lifespans for pets, which in turn drives up spending on healthcare for aging animals. Analysts expect this trend of increased spending on pet health to continue over the next decade.
Diana Rosero-Pena, Bloomberg Intelligence Consumer Staples Analyst and co-author of the report, highlighted a notable rise in consumer spending on pet products, predicting that the pet food market could grow by more than 50% by 2030.
Shopping Trends Among Pet Owners
In April 2024, Acosta Group released the results of a new study highlighting important insights into pet parents’ shopping habits. With two in three US households owning at least one dog or cat, spending on pet food, treats, and healthcare has become a significant part of household budgets. The study found that 96% of pet parents consider their pets family members, and 86% are willing to adjust their budgets to accommodate their pets’ needs. This presents a valuable opportunity for retailers and brands to target this large audience.
The study also highlighted key preferences among pet parents regarding food choices. 42% prioritize high-protein content for their pets, followed closely by 40% who focus on joint care and 38% who seek probiotics for gut health. Additionally, 36% of pet parents are interested in fresh, minimally processed foods. Brand loyalty plays a significant role in purchasing decisions, with 57% of dog owners and 59% of cat owners sticking to brands they have previously purchased. However, impulse buying is common, especially among millennials, with 58% influenced by in-store promotions. Most pet owners are turning to mass retailers, pet specialty stores, and online retailers for their pet care purchases, indicating a shift in how pet care products are accessed.
Overall, the pet industry remains a vital part of the global economy, driven by strong consumer attachment to pets and an ongoing commitment to their well-being.
Our Methodology
To compile our list of the 10 best pet stocks to invest in according to analysts, we reviewed our own rankings and consulted various online resources. From an initial pool of more than 20 pet stocks, we focused on the top pet stocks that analysts believe have the most potential for growth. We ranked the 10 best pet stocks to buy based on their average price target upside potential according to analysts as of October 29, 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s database of 912 elite hedge funds as of Q2 of 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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BARK Inc. (NYSE:BARK)
Average Price Target Upside Potential According to Analysts: 41.67%
Number of Hedge Fund Holders: 16
BARK Inc. (NYSE:BARK) is a dog-centric company that ranks second on our list of the best pet stocks to buy. The company is dedicated to making dogs happy through innovative products and services. BARK Inc. (NYSE:BARK) offers monthly subscription boxes like BarkBox and BARK Super Chewer, which deliver themed toys and treats. The company also delivers nutritious meals with BARK Food and products that meet dogs’ dental needs with BARK Bright.
Recently, on October 23, 2024, BARK Inc. (NYSE:BARK) announced a collaboration with Crocs to release Pet Crocs, allowing BarkBox and BARK Super Chewer subscribers to add the shoes for their dogs to their next box. Dog owners can also purchase matching shoes for themselves and their pets online at Crocs.com and in select retail locations while supplies last.
Additionally, in May 2024, the company launched BARK Air, the world’s first airline designed specifically for dogs, which has already generated significant interest and sales. In less than four months since its launch, BARK Air has booked over $2.5 million in ticket sales and has flown flights between major cities like New York, Los Angeles, and London.
Financially, BARK Inc. (NYSE:BARK) reported impressive results in its first quarter of fiscal 2025. The company achieved a revenue of $116.2 million, surpassing its guidance range. While direct-to-consumer revenue saw a slight decline of 4.3% year-over-year, commerce revenue grew by 5.2%, supported by the company’s recent consumables expansion into retail. BARK Inc. (NYSE:BARK) achieved year-over-year growth in new customer acquisition for the third consecutive quarter, reflecting strong demand for its products and services.
BARK Inc.’s (NYSE:BARK) innovative approach to dog care positions it as a compelling investment opportunity. The combination of unique product offerings, strategic partnerships, and expanding services like BARK Air showcases the company’s ability to capture and grow within the pet market.
According to Insider Monkey’s database, BARK Inc. (NYSE:BARK) has gained significant interest from institutional investors, with the number of hedge fund holders increasing to 16 in Q2 2024, up from 13 in Q1 2024.
Analysts are also bullish on BARK. The 1-year median price target of $2.04 set by analysts indicates a potential upside of 41% from current levels.
Overall, BARK ranks 2nd on our list of the best pet stocks to invest in according to analysts. While we acknowledge the potential of BARK as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BARK but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
