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Petco Health and Wellness Company
(NASDAQ:WOOF)
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Rating:48Neutral
Price Target:
$2.50
▼(-17.49% Downside)
Action:Reiterated
Date:07/02/26
The score is held back primarily by elevated leverage and very thin profitability despite improving operations, with valuation also unfavorable given the very high P/E. Offsetting these risks are solid TTM cash generation and a cautiously positive earnings-call backdrop (reaffirmed guidance, improving comps and services-led momentum), while technical signals remain neutral-to-weak with the stock below its 200-day average.
Positive Factors
Strong cash generation
Sustained positive operating and free cash flow provides a durable liquidity buffer to fund capex, inventory investments and gradual deleveraging without relying solely on equity or new debt. This cash generation supports multi-quarter execution of strategy despite thin accounting profits.
Negative Factors
High leverage limits flexibility
A materially leveraged balance sheet constrains strategic optionality in a low-margin retail model: it limits capital available for reinvestment, slows the pace of share repurchases or M&A, raises refinancing risk if conditions tighten, and makes results sensitive to small earnings swings over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained positive operating and free cash flow provides a durable liquidity buffer to fund capex, inventory investments and gradual deleveraging without relying solely on equity or new debt. This cash generation supports multi-quarter execution of strategy despite thin accounting profits.
Read all positive factors
Petco Health and Wellness Company Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue from different business areas, highlighting which segments drive growth and profitability, and indicating potential areas of strategic focus or risk.
Breaks down revenue from different business areas, highlighting which segments drive growth and profitability, and indicating potential areas of strategic focus or risk.
Data provided by:
The Fly
The FlyPetco Health and Wellness Company (WOOF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$731.05M
Dividend YieldN/A
Average Volume (3M)2.34M
Price to Earnings (P/E)123.2
Beta (1Y)1.72
Revenue Growth-1.91%
EPS GrowthN/A
CountryUS
Employees29,000
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.02
Shares Outstanding247,774,480
10 Day Avg. Volume1,621,352
30 Day Avg. Volume2,338,456
Financial Highlights & Ratios
PEG Ratio-0.76
Price to Book (P/B)0.65
Price to Sales (P/S)0.13
P/FCF Ratio4.02
Enterprise Value/Market Cap4.61
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit1.46
Enterprise Value/Ebitda10.18
Forecast
1Y Price Target
$3.52Price Target Upside16.17% Upside
Rating ConsensusHold
Number of Analyst Covering7
EPS Forecast (FY)0.2
Revenue Forecast (FY)$5.99B
Petco Health and Wellness Company Business Overview & Revenue Model
Company Description
Petco Health and Wellness Company, Inc. operates as an enterprise focused on enhancing the well-being of companion animals, their human guardians, and its own associates. The company offers a broad spectrum of services, including veterinary care (...
How the Company Makes Money
Petco primarily makes money by selling pet-related products and by providing recurring pet services. Its revenue is generally driven by: (1) Merchandise sales: retail and online sales of consumables (notably pet food and treats) and non-consumable...
Petco Health and Wellness Company Earnings Call Summary
Earnings Call Date:Jun 03, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 20, 2026
Earnings Call Sentiment Positive
The call balanced multiple operational and financial improvements against a few persistent structural and external risks. Highlights include a return to positive comps (+0.7%), expanded margins (gross margin +21 bps), adjusted EBITDA growth (+8.8% YoY to $97.3M), strong services momentum (microchips +71% YoY, vet productivity gains), improved liquidity and lower debt, inventory discipline, and a reaffirmed full‑year outlook. Lowlights center on a Q1 free cash flow outflow of $69M, continued store closures and the fact management has not yet reclaimed market share, plus remaining leverage and reliance on tariff/fuel assumptions. Overall, positives and momentum from the Phase III strategy significantly outweigh the modest near‑term headwinds and conservatism in guidance.Positive Updates
Return to Positive Comparable Sales
Comparable sales returned to positive, +0.7% comp, with net sales up 0.2% to $1.5B in Q1, demonstrating early traction from the Phase III strategy (note: net sales vs comp spread partly driven by 16 net store closures in 2025 and 4 in Q1).
Negative Updates
First Quarter Free Cash Flow Outflow
Free cash flow was an outflow of $69M in Q1 (management notes Q1 is historically the weakest cash quarter); the outflow was impacted by planned inventory investments to support growth and capital spending timing.
Read all updates
Q1-2026 Updates
Positive
Negative
Return to Positive Comparable Sales
Comparable sales returned to positive, +0.7% comp, with net sales up 0.2% to $1.5B in Q1, demonstrating early traction from the Phase III strategy (note: net sales vs comp spread partly driven by 16 net store closures in 2025 and 4 in Q1).
Read all positive updates
Company Guidance
Management reaffirmed full‑year 2026 guidance: net sales flat to up 1.5% year‑over‑year and adjusted EBITDA of $415–$430 million, with Q2 guidance implying ~0.3% net‑sales growth and adjusted EBITDA of $110–$112 million. Key assumptions include fuel at current levels for the rest of the year, only the tariff refund received in May included (no further refunds assumed) and current tariff policies remaining; unchanged line‑item assumptions are net interest ≈ $125M, depreciation & amortization ≈ $200M, capex ≈ $140M, net store closures 15–20 (weighted to the back half), and a full‑year spread between total sales and comp sales of about 50 basis points. Management noted Q1 context—net sales $1.5B (+0.2%), comp +0.7%, adjusted EBITDA $97.3M, Q1 capex $10M, free cash flow outflow $69M, ending cash $167M, total liquidity $654.4M and total debt $1.48B—while reiterating a goal to reduce leverage to ~2x.Petco Health and Wellness Company Financial Statement Overview
Summary
Income Statement
42
Neutral
Balance Sheet
34
Negative
Cash Flow
55
Neutral
| Breakdown | TTM | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.96B | 5.96B | 6.12B | 6.26B | 6.04B | 5.81B |
| Gross Profit | 2.31B | 2.31B | 2.32B | 2.35B | 2.43B | 2.43B |
| EBITDA | 330.79M | 343.24M | 215.29M | -971.83M | 407.75M | 452.22M |
| Net Income | 5.58M | 9.07M | -101.82M | -1.28B | 90.80M | 164.42M |
Balance Sheet | ||||||
| Total Assets | 5.08B | 5.17B | 5.19B | 5.36B | 6.61B | 6.50B |
| Cash, Cash Equivalents and Short-Term Investments | 166.80M | 256.74M | 165.76M | 125.43M | 201.90M | 211.60M |
| Total Debt | 2.78B | 2.86B | 2.96B | 3.04B | 3.13B | 3.05B |
| Total Liabilities | 3.93B | 4.01B | 4.08B | 4.18B | 4.23B | 4.24B |
| Stockholders Equity | 1.16B | 1.16B | 1.11B | 1.18B | 2.38B | 2.27B |
Cash Flow | ||||||
| Free Cash Flow | 232.07M | 186.95M | 49.68M | -9.88M | 67.98M | 119.11M |
| Operating Cash Flow | 360.18M | 314.05M | 177.67M | 215.72M | 346.00M | 358.21M |
| Investing Cash Flow | -164.60M | -124.56M | -123.90M | -207.44M | -320.32M | -237.08M |
| Financing Cash Flow | -106.68M | -101.75M | -8.75M | -85.35M | -33.84M | -18.78M |
Petco Health and Wellness Company Technical Analysis
Negative
3.03
Price Trends
2.71
Negative
2.75
Negative
2.94
Negative
Market Momentum
-0.05
Positive
42.81
Neutral
22.22
Neutral
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 3.03 is above the 20-day moving average (MA) of 2.65, above the 50-day MA of 2.71, and above the 200-day MA of 2.94, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 42.81 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for WOOF.
Petco Health and Wellness Company Risk Analysis
Petco Health and Wellness Company disclosed 68 risk factors in its most recent earnings report. Petco Health and Wellness Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Petco Health and Wellness Company Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $8.46B | 44.15 | 44.82% | ― | 6.14% | -32.48% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $851.67M | -38.32 | -36.11% | ― | 10.25% | 70.25% | |
50 Neutral | $84.41M | -2.08 | -46.76% | ― | -18.45% | -21.02% | |
48 Neutral | $731.05M | 123.19 | 0.48% | ― | -1.91% | ― | |
46 Neutral | $242.29M | -1.78 | -55.53% | ― | -9.53% | 20.64% | |
43 Neutral | $16.30M | -18.05 | -3.23% | 25.20% | -10.54% | -332.20% |
* Consumer Cyclical Sector Average
WOOF
Petco Health and Wellness Company
2.56
-0.42
-14.09%
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Petco Health and Wellness Company Corporate Events
Business Operations and StrategyExecutive/Board ChangesShareholder Meetings
Petco Stockholders Approve Equity Plan and Board Elections
Positive
Jul 1, 2026
On June 30, 2026, Petco stockholders approved an amendment to the company’s 2021 Equity Incentive Plan, increasing the pool of Class A common shares available for equity awards by 15,500,000, a move that enhances Petco’s capacity to us...
Business Operations and StrategyFinancial Disclosures
Petco Returns to Comparable Sales Growth, Reaffirms 2026 Outlook
Positive
Jun 3, 2026
On June 3, 2026, Petco reported first-quarter 2026 results that showed a return to positive comparable sales growth, with net sales up 0.2% to $1.5 billion and comps rising 0.7%, driven by improving consumables and continued strength in its servic...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.