Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $1.22B
• Dividend Yield: N/A
• Average Volume (3M): 4.15M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.62
• Revenue Growth: -2.37%
• EPS Growth: 95.07%
• Country: US
• Employees: 29,000
• Sector: Consumer Cyclical
• Sector Strength: 71
• Industry: Specialty Retail
• EPS (TTM): <0.01
• Shares Outstanding: 241,197,070
• 10 Day Avg. Volume: 4,379,532
• 30 Day Avg. Volume: 4,146,671
• PEG Ratio: -0.35
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.74
• Enterprise Value/Market Cap: 2.98
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 1.56
• Enterprise Value/Ebitda: -9.77
• 1Y Price Target: $3.75
• Price Target Upside: -1.32% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 56 Neutral
• Price Target: $4.00 ▲(5.26%Upside)

Petco's stock score is primarily impacted by its financial performance challenges, including declining revenue and high leverage. Despite these issues, the company shows potential through strong technical momentum and strategic initiatives discussed in the earnings call. Valuation remains a concern due to negative profitability metrics. The overall outlook is cautiously optimistic as the company focuses on operational efficiencies and new growth strategies.

Positive Factors

Margin Management

Gross margin of 38.2% was supported by margin management efforts, including merchandising and better management of markdowns and promotions.

Market Opportunity

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

Profitability

Petco reported F1Q adj. EBITDA of $89.4mn, which was ahead of consensus expectations.

Negative Factors

Market Competition

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

Sales Decline

Net sales were down -2.3% year over year, reflecting comp declines and the impact of 30 net store closings.

Turnaround Risk

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., 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 Health and Wellness Company generates revenue through multiple streams. The primary source of income is the sale of pet food, supplies, and accessories, which are available both in-store and online. In addition to retail sales, Petco earns income from its grooming services, veterinary care, and training sessions offered at its physical locations. The company also benefits from various partnerships with pet product manufacturers and service providers, enhancing its product offerings and customer reach. These revenue streams are supported by a strong brand presence and a loyal customer base, driving consistent earnings for the company.

Petco Health and Wellness Company Financial Statement Overview

Summary

Petco Health and Wellness Company faces significant financial challenges, with a revenue decline and persistent losses impacting profitability. The high leverage and negative ROE are concerns for financial stability, while cash flow metrics show some ability to generate operational cash despite challenges.

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	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	6.12B	6.26B	6.04B	5.81B	4.92B
Gross Profit	2.32B	2.35B	2.43B	2.43B	2.11B
EBITDA	7.05M	-971.83M	407.75M	452.22M	352.36M
Net Income	-101.82M	-1.28B	90.80M	164.42M	-26.48M
Balance Sheet
Total Assets	5.19B	5.36B	6.61B	6.50B	6.08B
Cash, Cash Equivalents and Short-Term Investments	165.76M	125.43M	201.90M	211.60M	111.40M
Total Debt	2.94B	3.04B	3.13B	3.05B	3.00B
Total Liabilities	4.08B	4.18B	4.23B	4.24B	4.02B
Stockholders Equity	1.11B	1.18B	2.38B	2.27B	2.07B
Cash Flow
Free Cash Flow	49.68M	-9.88M	67.98M	119.11M	109.06M
Operating Cash Flow	177.67M	215.72M	346.00M	358.21M	268.62M
Investing Cash Flow	-123.90M	-207.44M	-320.32M	-237.08M	-157.19M
Financing Cash Flow	-8.75M	-85.35M	-33.84M	-18.78M	-146.61M

Petco Health and Wellness Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 3.8 is above the 20-day moving average (MA) of 3.15, above the 50-day MA of 3.15, and above the 200-day MA of 3.55, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 62.14 is Neutral, neither overbought nor oversold. The STOCH value of 83.82 is Negative, 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	$37.77B	19.58	36.48%	1.36%	2.04%	-15.61%
CHWY	74 Outperform	$15.43B	41.63	76.24%	―	7.64%	369.79%
BBY	67 Neutral	$14.47B	16.73	30.21%	5.62%	-3.23%	-28.11%
GPC	66 Neutral	$18.73B	23.20	17.50%	3.05%	2.65%	-32.91%
Sector *	63 Neutral	$17.10B	10.79	-8.01%	2.94%	1.62%	-25.73%
WOOF	56 Neutral	$1.22B	―	-5.90%	―	-2.37%	95.07%
GME	54 Neutral	$10.53B	51.02	6.62%	―	-25.30%	479.26%

Petco Health and Wellness Company Corporate Events

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.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.25 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

Petco Board Member Christy Lake Resigns

On May 19, 2025, Christy Lake resigned from Petco Health and Wellness Company‘s Board of Directors and its compensation committee, effective after the 2025 Annual Meeting of Stockholders. Her resignation was not due to any disagreement with the company. Following her resignation, the Board decided to reduce its size to 10 directors.

The most recent analyst rating on (WOOF) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.