PETS Soars 35% on Unsolicited Takeover Offer—What’s Next for Petmed Express?

Summary
• Petmed Express (PETS) surges 35.71% intraday to $3.895, hitting a 52-week high of $5.58
• Cardone Ventures’ $4.25/share cash offer triggers $89 million valuation, 46% above current price
• Intraday range spans $2.79 to $4.10, with turnover of 11.5 million shares

Petmed Express has ignited a market frenzy as its stock rockets 35.7% in a single session, driven by a bold $4.25/share takeover proposal from Cardone Ventures. The all-cash offer, valued at $89 million, has pushed PETS to its highest level since 2023, despite lingering regulatory and operational risks. With the stock trading 35% above its previous close of $2.87, investors are scrambling to assess whether this surge is a fleeting spike or a catalyst for sustained momentum.

Takeover Offer Ignites Volatility
The explosive 35.7% rally in Petmed Express is directly attributable to Cardone Ventures’ unsolicited $4.25/share cash offer, which values the company at $89 million. This represents a 46% premium to PETS’ previous close of $2.87 and a 28% discount to its 52-week high of $5.58. The offer, delivered to the board without financing contingencies, has created immediate upside pressure as shareholders weigh the likelihood of a deal. However, the stock’s 35% gain remains below the $4.25 offer price, suggesting lingering skepticism about the proposal’s execution risk.

Drug Retail Sector Underperforming as PETS Defies Trend
While PETS surges, the broader Drug Retail sector, led by CVS Health (CVS), languishes with a -2.03% intraday decline. CVS’ weakness highlights divergent market dynamics: PETS’ move is driven by a specific takeover event, whereas sector peers face broader retail and healthcare sector headwinds. This decoupling underscores the idiosyncratic nature of PETS’ rally, which is not reflective of sector-wide momentum.

Options Playbook: Leveraging Volatility with Gamma-Driven Calls
• MACD: 0.074 (bullish crossover), RSI: 82.89 (overbought), 200D MA: $3.13 (below price)
• Bollinger Bands: Price at $3.895 vs. upper band $2.806 (contraction phase)

PETS’ technicals signal a short-term bullish trend amid overbought conditions. The stock is trading above its 200-day moving average and MACD histogram expansion, but RSI near 83 warns of potential exhaustion. For options traders, the PETS20260320C5 and PETS20260618C5 contracts stand out:

• PETS20260320C5 (Mar 20, 2026):
- IV: 64.03% (moderate volatility)
- Delta: 0.29 (modest directional exposure)
- Theta: -0.0027 (slow time decay)
- Gamma: 0.268 (high sensitivity to price swings)
- Turnover: 8,231 (liquid)
- Leverage: 19.6% (moderate)
- Payoff at 5% upside ($4.09): $0.09 per share
This contract offers a balance of gamma and liquidity, ideal for capitalizing on continued volatility ahead of March 2026.

• PETS20260618C5 (Jun 18, 2026):
- IV: 52.88% (lower volatility)
- Delta: 0.34 (moderate directional bias)
- Theta: -0.0017 (slow decay)
- Gamma: 0.249 (responsive to price moves)
- Turnover: 4,585 (liquid)
- Leverage: 14.0% (moderate)
- Payoff at 5% upside ($4.09): $0.09 per share
This contract provides extended exposure to potential upside, leveraging PETS’ long-term ranging pattern.

Aggressive bulls should consider PETS20260320C5 into a break above $4.10.

Backtest Petmed Express Stock Performance
The backtest of PETS ETF after a 36% intraday surge from 2022 to now shows poor performance. The 3-Day win rate is 40.69%, the 10-Day win rate is 36.23%, and the 30-Day win rate is 31.76%. The ETF experienced a maximum return of -0.20% over 30 days, with a maximum return day at 0.

Takeover Uncertainty and Gamma-Driven Plays: What to Watch Now
The sustainability of PETS’ rally hinges on the board’s response to Cardone’s $4.25 offer and the resolution of ongoing regulatory scrutiny. While technicals suggest a short-term bullish bias, the overbought RSI and sector underperformance caution against overexposure. Investors should monitor the $3.13 (200D MA) support and $4.10 intraday high as critical levels. Meanwhile, CVS’ -2.03% decline underscores sector-wide challenges, making PETS’ idiosyncratic move even more compelling. Aggressive traders should target PETS20260320C5 if $4.10 breaks, while conservative players watch for a pullback to $3.08 (200D support).