Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $824.05M
• Dividend Yield: N/A
• Average Volume (3M): 3.00M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.84
• Revenue Growth: -3.85%
• EPS Growth: 97.87%
• Country: US
• Employees: 29,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.04
• Shares Outstanding: 243,453,340
• 10 Day Avg. Volume: 1,993,967
• 30 Day Avg. Volume: 2,995,166
• PEG Ratio: 0.10
• Price to Book (P/B): 0.84
• Price to Sales (P/S): 0.15
• P/FCF Ratio: 18.82
• Enterprise Value/Market Cap: 4.41
• Enterprise Value/Revenue: 0.61
• Enterprise Value/Gross Profit: 1.61
• Enterprise Value/Ebitda: 11.76
• 1Y Price Target: $3.88
• Price Target Upside: 34.26% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): 0.14
• Revenue Forecast (FY): $5.96B

• Rating: 51 Neutral
• Price Target: $3.00 ▲(3.81% Upside)

Petco's overall stock score reflects financial challenges with declining revenues and profitability issues, offset by improvements in cash flow and leverage. The positive trajectory in profitability and cash flow from the earnings call provides some optimism, but technical indicators and valuation concerns weigh on the score.

Positive Factors

Services Segment Growth

Growth in services like grooming and veterinary care indicates a strong competitive moat and high barriers to entry, supporting long-term revenue stability.

Improved Cash Flow

Significant improvements in cash flow enhance financial flexibility, allowing for strategic investments and debt reduction, supporting long-term growth.

Gross Margin Expansion

Gross margin expansion through disciplined pricing and cost management indicates operational efficiency, which can sustain profitability over time.

Negative Factors

Decline in Net Sales

A decline in net sales and comparable sales reflects challenges in maintaining market share, which could impact long-term revenue growth.

Impact of Tariffs

Increased costs due to tariffs can pressure margins and profitability, potentially hindering financial performance if not mitigated.

Store Closures

Store closures may reduce physical market presence, affecting customer reach and sales, posing a risk to revenue growth and market share.

Petco Health and Wellness Company Business Overview & Revenue Model

Company Description

Petco Health and Wellness Company, Inc., a health and wellness company, focuses on enhancing the lives of pets, pet parents, and its Petco partners. The company provides veterinary care, grooming, training, tele-health, and Vital Care and pet health insurance services, as well as veterinary services through Vetco mobile clinics. It also offers pet consumables, supplies, and services through its petco.com, petcoach.co, petinsurancequotes.com, and pupbox.com websites. As of March 23, 2022, the company operated approximately 1,500 Petco locations in the United States, Mexico, and Puerto Rico that included a network of approximately 200 in-store veterinary hospitals. Petco Health and Wellness Company, Inc. was founded in 1965 and is headquartered in San Diego, California.

How the Company Makes Money

Petco generates revenue through multiple key streams, primarily from the sale of pet food and supplies in its retail stores and e-commerce platform. The company also earns significant income from its veterinary services, including routine check-ups, vaccinations, and other medical care provided at its in-store clinics. Additionally, Petco offers pet insurance plans through partnerships with insurance providers, which contributes to its revenue. The company has engaged in various partnerships and collaborations to enhance its service offerings and expand its market reach, further solidifying its financial performance.

Petco Health and Wellness Company Financial Statement Overview

Summary

Petco faces financial challenges with declining revenues and profitability issues. Despite a negative net profit margin and return on equity, the company has improved its debt-to-equity ratio and shown strong cash flow generation. Continued focus on operational efficiency and revenue growth is crucial.

Income Statement

Petco's income statement reveals a challenging financial environment. The TTM data shows a negative net profit margin of -0.04%, indicating the company is currently unprofitable. Revenue has declined by 7.78% in the TTM period, reflecting a downturn in sales. However, the gross profit margin remains relatively stable at 38.57%, suggesting some resilience in cost management. The EBIT and EBITDA margins are low, at 1.32% and 4.29% respectively, indicating limited operational efficiency.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 1.20 in the TTM, which is an improvement from the previous year's 2.66, indicating a reduction in leverage. However, the return on equity is negative at -0.19%, reflecting ongoing profitability challenges. The equity ratio stands at 22.24%, suggesting a moderate level of equity financing relative to total assets.

Cash Flow

Petco's cash flow statement indicates some positive trends, with a significant free cash flow growth rate of 120.89% in the TTM, suggesting improved cash generation. The operating cash flow to net income ratio is 0.17, indicating that cash flow from operations is covering net losses. The free cash flow to net income ratio is 0.31, showing that the company is generating cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	6.00B	6.12B	6.26B	6.04B	5.81B	4.92B
Gross Profit	2.26B	2.32B	2.35B	2.43B	2.43B	2.11B
EBITDA	309.21M	7.05M	-971.83M	407.75M	452.22M	352.36M
Net Income	-2.20M	-101.82M	-1.28B	90.80M	164.42M	-26.48M
Balance Sheet
Total Assets	5.21B	5.19B	5.36B	6.61B	6.50B	6.08B
Cash, Cash Equivalents and Short-Term Investments	237.41M	165.76M	125.43M	201.90M	211.60M	111.40M
Total Debt	1.39B	2.96B	3.04B	3.13B	3.05B	3.00B
Total Liabilities	4.05B	4.08B	4.18B	4.23B	4.24B	4.02B
Stockholders Equity	1.16B	1.11B	1.18B	2.38B	2.27B	2.07B
Cash Flow
Free Cash Flow	129.61M	49.68M	-9.88M	67.98M	119.11M	109.06M
Operating Cash Flow	256.52M	177.67M	215.72M	346.00M	358.21M	268.62M
Investing Cash Flow	-121.82M	-123.90M	-207.44M	-320.32M	-237.08M	-157.19M
Financing Cash Flow	-6.30M	-8.75M	-85.35M	-33.84M	-18.78M	-146.61M

Petco Health and Wellness Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WOOF, the sentiment is Negative. The current price of 2.89 is below the 20-day moving average (MA) of 3.07, below the 50-day MA of 3.19, and below the 200-day MA of 3.19, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 40.40 is Neutral, neither overbought nor oversold. The STOCH value of 13.47 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
TDUP	55 Neutral	$790.90M	-20.30	-35.37%	―	-4.90%	50.77%
CHWY	54 Neutral	$13.26B	65.97	59.58%	―	9.80%	-46.84%
FLWS	51 Neutral	$262.94M	-1.20	-67.22%	―	-8.07%	-2206.16%
WOOF	51 Neutral	$824.05M	-271.30	-0.19%	―	-3.85%	97.87%
NHTC	48 Neutral	$35.46M	-301.96	-0.38%	25.20%	-5.07%	-115.50%
BARK	48 Neutral	$111.28M	-3.17	-33.59%	―	-7.61%	-18.41%

Petco Health and Wellness Company Corporate Events

Petco Revises Fiscal 2025 Earnings Outlook Upward

On November 25, 2025, Petco announced its third-quarter financial results, reporting a 3.1% year-over-year decrease in net sales to $1.5 billion, in line with its outlook. Despite the sales decline, Petco improved its gross profit margin and operating income, and increased its adjusted EBITDA. The company revised its fiscal 2025 earnings outlook upward, indicating a strengthened economic model and setting the stage for growth in 2026. Petco’s strategic focus on profitability and operational transformation is expected to enhance its competitive positioning and stakeholder value.