Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $856.97M
• Dividend Yield: N/A
• Average Volume (3M): 5.38M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.69
• Revenue Growth: -2.22%
• EPS Growth: 92.17%
• Country: US
• Employees: 29,000
• Sector: Consumer Cyclical
• Sector Strength: 58
• Industry: Specialty Retail
• EPS (TTM): -0.37
• Shares Outstanding: 239,544,400
• 10 Day Avg. Volume: 4,124,231
• 30 Day Avg. Volume: 5,378,644
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.12
• Price to Cash Flow (P/CF): 9.20
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $3.73
• Price Target Upside: 20.71% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

Petco's stock score of 54 reflects a mix of challenges and opportunities. Financial performance is hindered by negative net income and high leverage, though positive operating cash flows provide a glimmer of hope. Technical indicators show short-term optimism, but long-term caution remains. Valuation concerns due to negative earnings further weigh on the score. Earnings call insights into strategic initiatives are positive, but execution risks persist.

Positive Factors

Financial Performance

Petco's 3Q results were slightly ahead of expectations, indicating positive performance.

Management and Strategy

A fresh management team is moving with speed to optimize the business and realize efficiencies.

Market Opportunity

The Pet category is vibrant with significant growth potential for both product and services, suggesting a strong market opportunity.

Negative Factors

Competitive Environment

The category is intensely competitive, and consumers tend to be sticky, making it challenging for the company to reshape its brand.

Debt and Financial Risks

The debt burden remains an overhang, and will likely continue to weigh on shares.

Turnaround Challenges

There is a risk of a stalled turnaround and inability to reinvigorate comparable sales, which could lower the company's valuation.

Petco Health and Wellness Company Business Overview & Revenue Model

Company Description

Petco Health and Wellness Company, Inc. (WOOF) is a leading retailer in the pet care industry, providing a comprehensive range of products and services designed to enhance the health and wellness of pets. The company operates across various sectors, including pet food, supplies, and services such as grooming, training, and veterinary care. Petco is committed to fostering healthier relationships between pets and their owners through high-quality products and a focus on animal well-being.

How the Company Makes Money

Petco Health and Wellness Company generates revenue through multiple streams. A significant portion of its income comes from the sale of pet food, supplies, and accessories in its retail stores and through e-commerce platforms. Additionally, Petco offers a variety of pet services, including grooming, training, and veterinary care, which contribute to its revenue. The company also benefits from partnerships with pet product manufacturers and exclusive brand offerings. Petco's earnings are further supported by its loyalty program, which drives repeat business and customer retention.

Petco Health and Wellness Company Financial Statement Overview

Summary

Petco Health and Wellness Company is facing financial challenges. The income statement indicates declining net income, with a significant loss in the trailing twelve months. The balance sheet reflects high leverage and diminishing equity, posing financial risks. Although there is some strength in operational cash flow, the company's overall financial health is under pressure due to high debt levels and profitability challenges.

Income Statement

The income statement shows a challenging trajectory with a declining net income, moving from a profit in 2023 to a significant loss in TTM. Gross profit margin is positive but has slightly decreased over the period, indicating pressure on cost management. Revenue growth is modest over the years, but recent figures suggest stagnation or decline.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage that poses financial risk. Stockholders' equity has been decreasing, reflecting the impact of losses. The equity ratio is low, suggesting limited financial stability. The decrease in total assets and stockholders' equity over recent periods is concerning.

Cash Flow

Cash flow analysis shows some strength in operating cash flow, which remains positive. Free cash flow has fluctuated, but recent growth is a positive sign. The cash flow metrics indicate some operational resilience despite profitability challenges, but reliance on debt financing remains a concern.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
6.24B	6.26B	6.04B	5.81B	4.92B	4.43B
	Gross Profit
2.34B	2.35B	2.43B	2.43B	2.11B	1.91B
	EBIT
13.60M	-1.18B	225.56M	266.07M	194.40M	110.60M
	EBITDA
193.01M	-971.83M	407.75M	464.20M	383.76M	316.84M
	Net Income Common Stockholders
-110.55M	-1.28B	90.80M	164.42M	-38.30M	-106.42M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
178.20M	125.43M	201.90M	211.60M	111.40M	148.78M
	Total Assets
1.65B	5.36B	6.61B	6.50B	6.08B	6.16B
	Total Debt
534.28M	3.03B	3.11B	3.02B	2.99B	4.69B
	Net Debt
356.08M	2.90B	2.91B	2.81B	2.88B	4.54B
	Total Liabilities
751.22M	4.18B	4.23B	4.24B	4.02B	5.59B
	Stockholders Equity
909.95M	1.18B	2.38B	2.27B	2.07B	569.39M
Cash Flow		Free Cash Flow
92.78M	-9.88M	67.98M	119.11M	109.06M	-47.02M
	Operating Cash Flow
232.88M	215.72M	346.00M	358.21M	268.62M	110.34M
	Investing Cash Flow
-140.80M	-207.44M	-320.32M	-237.08M	-157.19M	-139.04M
	Financing Cash Flow
-113.30M	-85.35M	-33.84M	-18.78M	-146.61M	-3.07M

Petco Health and Wellness Company Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3.09
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WOOF, the sentiment is Neutral. The current price of 3.09 is above the 20-day moving average (MA) of 2.97, above the 50-day MA of 2.84, and below the 200-day MA of 3.66, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 53.69 is Neutral, neither overbought nor oversold. The STOCH value of 61.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WOOF.

Petco Health and Wellness Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHWY	76 Outperform	$14.58B	39.19	101.78%	―	6.40%	891.13%
EBAY	73 Outperform	$30.88B	16.81	34.29%	1.66%	2.79%	-23.30%
GPC	67 Neutral	$15.99B	17.81	20.69%	3.53%	1.71%	-30.78%
BBY	60 Neutral	$13.10B	14.48	31.63%	6.08%	-4.43%	-24.58%
Sector *	60 Neutral	$6.54B	11.34	3.27%	4.27%	2.37%	-20.86%
WOOF	54 Neutral	$856.97M	―	-8.86%	―	-2.22%	92.17%
GME	54 Neutral	$11.97B	100.83	4.19%	―	-27.50%	1150.23%

Petco Health and Wellness Company Corporate Events

Petco Reports Decrease in Revenue, Improves Cash Flow

Petco Health and Wellness Company reported its financial results for the fourth quarter and full year 2024, showing a decrease in net revenue and gross profit compared to the previous year. Despite these declines, the company reduced its GAAP net loss significantly and improved its free cash flow. CEO Joel Anderson expressed confidence in the new leadership team’s ability to drive double-digit adjusted EBITDA growth in 2025, positioning the company for sustainable profitable growth.

Petco Announces New CFO Sabrina Simmons

On February 18, 2025, Petco Health and Wellness Company announced a leadership change with Sabrina Simmons succeeding Brian LaRose as Chief Financial Officer, effective February 17, 2025. Mr. LaRose transitioned to a non-officer role and will remain with the company until April 30, 2025, to assist with the transition. He entered into a transition and separation agreement, receiving a lump sum payment and other benefits as part of his departure package.

Petco Appoints New CFO and Leadership Team

On February 17, 2025, Petco Health and Wellness Company appointed Sabrina Simmons as Chief Financial Officer, succeeding Brian LaRose who will remain in an advisory role until April 30, 2025. Petco also announced the appointments of Michael Romanko as Chief Customer and Product Officer, and Jack Stout as Chief Merchandising Officer, effective February 24, 2025. These leadership changes are part of Petco’s strategy to accelerate operational improvements and return to profitable growth, leveraging the extensive retail expertise of the new appointees.