Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $958.48M
• Dividend Yield: N/A
• Average Volume (3M): 4.09M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.71
• Revenue Growth: -2.83%
• EPS Growth: 97.94%
• Country: US
• Employees: 29,000
• Sector: Consumer Cyclical
• Sector Strength: 83
• Industry: Specialty Retail
• EPS (TTM): 0.09
• Shares Outstanding: 242,466,860
• 10 Day Avg. Volume: 6,536,330
• 30 Day Avg. Volume: 4,091,896
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.74
• Enterprise Value/Revenue: 0.59
• Enterprise Value/Gross Profit: 1.55
• Enterprise Value/Ebitda: 14.23
• 1Y Price Target: $3.98
• Price Target Upside: 8.45% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 12

• Rating: 56 Neutral
• Price Target: $3.50 ▼(-4.63% Downside)

Petco's overall stock score reflects significant financial challenges, with high leverage and ongoing losses impacting its financial performance. However, the company shows positive signs in technical analysis and earnings call insights, with improvements in profitability and operational efficiency. Valuation remains a concern due to negative earnings, but strategic improvements could enhance future prospects.

Positive Factors

Earnings

Adjusted EBITDA of $113.9 million was above estimates and company guidance.

Financial Performance

Management raised their full-year earnings outlook for adjusted EBITDA.

Margins

Gross margin of 39.3% was supported by margin management efforts, exceeding expectations.

Negative Factors

Market Share

There is a risk of continued market share erosion as consumers move towards online and broadline competitors offering greater convenience or value.

Revenue

Net revenue decreased by 2.3% year-over-year, falling short of estimates.

Sales Performance

Comparable sales decreased by 1.4% year-over-year, which was lower than expected.

Petco Health and Wellness Company Business Overview & Revenue Model

Company Description

Petco Health and Wellness Company (WOOF) is a leading pet specialty retailer that focuses on delivering health and wellness solutions for pets. The company operates in various sectors including pet food, supplies, and services, offering a wide range of products such as premium pet food, grooming, training, and veterinary services. Petco's commitment to improving the health and well-being of pets is reflected in its comprehensive approach to pet care, making it a trusted resource for pet owners.

How the Company Makes Money

Petco generates revenue through multiple key streams, primarily from the sale of pet food and supplies, which includes both premium and everyday products. Additionally, the company offers services such as grooming, training, and veterinary care, which contribute significantly to its earnings. The growth of its e-commerce platform has also enhanced revenue, allowing Petco to reach a broader customer base. Strategic partnerships with brands and suppliers, along with loyalty programs for customers, further bolster its financial performance. The company's focus on health and wellness also positions it well within the growing market for pet care, supporting sustained revenue growth.

Petco Health and Wellness Company Financial Statement Overview

Summary

Petco Health and Wellness Company faces significant financial challenges, with declining revenue and persistent losses impacting profitability. The company’s high leverage and negative ROE are concerns for financial stability, while cash flow metrics indicate some ability to generate operational cash despite challenges. The financial outlook suggests a need for strategic adjustments to improve profitability and reduce leverage.

Income Statement

Petco Health and Wellness Company has shown inconsistent revenue and profitability trends. The TTM revenue of $6.08 billion is slightly down from the previous annual figure of $6.12 billion, indicating a revenue decline. The gross profit margin for TTM is approximately 38.08%, showing some efficiency in cost management. However, the net profit margin is negative at -1.10%, reflecting continued losses. EBIT and EBITDA margins are weak at 0.66% and 4.14%, respectively, highlighting operational challenges.

Balance Sheet

The company's balance sheet reveals a high debt-to-equity ratio of 2.64, indicating significant leverage. Return on Equity (ROE) is negative due to net losses, which is a concern for profitability. The equity ratio stands at 21.63%, suggesting a moderate level of equity financing relative to total assets. Overall, the balance sheet shows high leverage and limited equity, posing financial stability risks.

Cash Flow

Petco's cash flow position is somewhat stable with a positive operating cash flow to net income ratio of -2.55, despite net losses, showing some ability to generate cash from operations. Free cash flow to net income ratio is -0.70, indicating challenges in achieving positive free cash flow amidst losses. The free cash flow growth rate is negative, reflecting decreased efficiency in capital allocation.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.08B	6.12B	6.26B	6.04B	5.81B	4.92B
Gross Profit	2.32B	2.32B	2.35B	2.43B	2.43B	2.11B
EBITDA	251.93M	7.05M	-971.83M	407.75M	452.22M	352.36M
Net Income	-66.99M	-101.82M	-1.28B	90.80M	164.42M	-26.48M
Balance Sheet
Total Assets	5.12B	5.19B	5.36B	6.61B	6.50B	6.08B
Cash, Cash Equivalents and Short-Term Investments	133.34M	165.76M	125.43M	201.90M	211.60M	111.40M
Total Debt	2.92B	2.94B	3.04B	3.13B	3.05B	3.00B
Total Liabilities	4.01B	4.08B	4.18B	4.23B	4.24B	4.02B
Stockholders Equity	1.11B	1.11B	1.18B	2.38B	2.27B	2.07B
Cash Flow
Free Cash Flow	46.87M	49.68M	-9.88M	67.98M	119.11M	109.06M
Operating Cash Flow	170.63M	177.67M	215.72M	346.00M	358.21M	268.62M
Investing Cash Flow	-119.29M	-123.90M	-207.44M	-320.32M	-237.08M	-157.19M
Financing Cash Flow	-3.46M	-8.75M	-85.35M	-33.84M	-18.78M	-146.61M

Petco Health and Wellness Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.67
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 3.67 is above the 20-day moving average (MA) of 3.41, above the 50-day MA of 3.25, and above the 200-day MA of 3.34, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 56.29 is Neutral, neither overbought nor oversold. The STOCH value of 33.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
EBAY	77 Outperform	$42.51B	19.92	42.63%	1.23%	3.05%	-10.82%
CHWY	72 Outperform	$16.28B	45.64	76.24%	―	7.64%	369.79%
BBY	70 Outperform	$16.28B	18.30	26.72%	4.96%	-3.23%	-28.11%
GPC	67 Neutral	$19.65B	24.33	17.50%	2.90%	2.65%	-32.91%
Sector *	61 Neutral	$17.97B	12.87	-5.30%	2.97%	1.26%	-14.45%
WOOF	56 Neutral	$958.48M	―	-2.48%	―	-2.83%	97.94%
GME	54 Neutral	$10.01B	48.50	6.62%	―	-25.30%	479.26%

Petco Health and Wellness Company Corporate Events

Petco Reports Q2 2025 Financial Results

Petco announced its financial results for the second quarter of 2025, reporting net sales of $1.5 billion, a 2.3% decrease year over year, and a gross profit margin increase to 39.3%. Despite the decline in sales, the company improved its operating income and net income, leading to an increased earnings outlook for the fiscal year 2025. Petco plans to continue its strategic investments to drive sustainable growth and maintain its competitive position in the market.

Petco to Present at Goldman Sachs Retail Conference

On August 21, 2025, Petco Health and Wellness Company announced its participation in the 32nd Annual Goldman Sachs Global Retailing Conference scheduled for September 4, 2025. The company will present at the conference, with a live webcast available on its investor relations page. This participation highlights Petco’s active engagement in the retail industry and its commitment to maintaining visibility and communication with stakeholders.

Petco Elects New Directors and Approves Executive Pay

On July 24, 2025, Petco Health and Wellness Company held its annual meeting of stockholders, where key decisions were made regarding the election of directors, executive compensation, and the appointment of an independent accounting firm. The stockholders elected R. Michael Mohan, David Lubek, and Christopher J. Stadler as Class II directors for a three-year term, approved the compensation of named executive officers, and ratified Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending January 31, 2026. These decisions are expected to influence the company’s governance and financial oversight in the coming years.

Petco Reports Q1 2025 Financial Results Amid Sales Dip

On June 5, 2025, Petco Health and Wellness Company reported its financial results for the first quarter of 2025, revealing a 2.3% decrease in net sales to $1.5 billion compared to the previous year, yet achieving an improved operating income of $16.4 million. Despite a slight decline in comparable sales, the company expanded its gross profit margin and improved its GAAP net loss, while reaffirming its fiscal 2025 net sales and earnings outlook. Petco’s CEO highlighted the company’s strategic focus on strengthening retail fundamentals and achieving sustainable growth, with the current market conditions accelerating these efforts.