Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $1.07B
• Dividend Yield: N/A
• Average Volume (3M): 3.40M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.59
• Revenue Growth: -2.22%
• EPS Growth: 92.17%
• Country: US
• Employees: 29,000
• Sector: Consumer Cyclical
• Sector Strength: 74
• Industry: Specialty Retail
• EPS (TTM): 0.02
• Shares Outstanding: 239,544,400
• 10 Day Avg. Volume: 3,486,888
• 30 Day Avg. Volume: 3,404,537
• PEG Ratio: -1.14
• Price to Book (P/B): 0.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.53
• Enterprise Value/Market Cap: 3.40
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 1.57
• Enterprise Value/Ebitda: -2.33
• 1Y Price Target: $3.73
• Price Target Upside: 2.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 11

• Rating: 53 Neutral
• Price Target: ―

Petco's overall stock score reflects significant challenges in financial performance, highlighted by negative net income and high leverage. While technical indicators suggest some upward momentum, the valuation remains unattractive due to a negative P/E ratio. The earnings call outlines both strategic initiatives and operational challenges, contributing to a balanced but cautious outlook.

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 Opportunities

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

Negative Factors

Competitive Landscape

The category is intensely competitive, and big box retailers have struggled to consistently capture market share.

Financial Challenges

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

Sales and Growth

Sales down 7% with continued margin improvement slightly ahead of Street.

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 faces challenges in profitability and financial stability, with negative net income and high leverage. Despite stalled revenue growth, positive operating cash flows provide a foundation for recovery. Strategic focus on improving margins and reducing debt could enhance overall financial performance.

Income Statement

Petco Health and Wellness Company has shown fluctuating revenue patterns, with a recent decline in total revenue. The gross profit margin remains relatively stable, but the net profit margin is negative due to consistent net losses. EBIT and EBITDA margins have also deteriorated, which indicates challenges in operational efficiency and profitability.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage. The return on equity is negative, reflecting consistent net losses, while the equity ratio has decreased, showing reduced financial stability. These factors suggest financial risk but also potential for improvement if liabilities are managed effectively.

Cash Flow

Operating cash flow has been positive, indicating some capacity to generate cash from core operations. However, free cash flow has been inconsistent, with recent improvements. The operating cash flow to net income ratio is relatively strong, but the free cash flow to net income ratio suggests volatility. Attention to cash management could enhance financial health.

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
	EBIT
7.05M	-1.18B	225.56M	266.07M	194.40M
	EBITDA
7.05M	-971.83M	407.75M	464.20M	383.76M
	Net Income Common Stockholders
-101.82M	-1.28B	90.80M	164.42M	-38.30M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
165.76M	125.43M	201.90M	211.60M	111.40M
	Total Assets
5.19B	5.36B	6.61B	6.50B	6.08B
	Total Debt
2.94B	3.04B	3.11B	3.02B	2.99B
	Net Debt
2.77B	2.92B	2.91B	2.81B	2.88B
	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: 3.65
• 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 3.65 is above the 20-day moving average (MA) of 3.22, above the 50-day MA of 3.00, and above the 200-day MA of 3.64, indicating a bullish trend. The MACD of 0.15 indicates Negative momentum. The RSI at 64.44 is Neutral, neither overbought nor oversold. The STOCH value of 84.96 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	78 Outperform	$33.38B	17.31	36.48%	1.51%	2.04%	-15.61%
CHWY	75 Outperform	$18.25B	48.45	101.78%	―	6.40%	891.13%
GPC	71 Outperform	$17.92B	21.20	19.19%	3.15%	1.99%	-32.18%
BBY	69 Neutral	$15.06B	16.62	31.63%	5.30%	-4.43%	-24.58%
Sector *	62 Neutral	$6.97B	11.36	2.77%	3.91%	2.66%	-22.00%
GME	54 Neutral	$12.75B	105.61	4.19%	―	-27.50%	1150.23%
WOOF	53 Neutral	$1.07B	―	-8.86%	―	-2.22%	92.17%

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.