Petco Health and Wellness Company (WOOF)
NASDAQ:WOOF
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Petco Health and Wellness Company
(NASDAQ:WOOF)
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Rating:54Neutral
Price Target:
$3.00
▲(11.94% Upside)
Action:ReiteratedDate:03/14/26
The score is anchored by mixed financial performance—improving cash flow and margins but pressured revenue and still-meaningful leverage. Technicals are supportive with strong momentum, though overheated signals increase pullback risk. Valuation is weakened by negative earnings, while the latest earnings call supports the trend of operational improvement but with only modest sales growth guidance and ongoing execution/macro headwinds.
Positive Factors
Improving cash generation
A sharp rebound in operating and free cash flow materially improves Petco's ability to service debt, fund targeted capex (~$140M), and invest in product and loyalty initiatives without immediately needing external financing. Durable positive cash generation increases financial optionality and lowers refinancing risk over coming quarters.
Negative Factors
Top-line weakness and modest guidance
Revenue declines in recent years and guidance for only flat to low-single-digit growth limit the pace at which operating leverage can compound. Modest top-line recovery constrains scalability of margin gains and delays the timeline for meaningful deleveraging and ROIC improvement absent faster execution or stronger demand.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving cash generation
A sharp rebound in operating and free cash flow materially improves Petco's ability to service debt, fund targeted capex (~$140M), and invest in product and loyalty initiatives without immediately needing external financing. Durable positive cash generation increases financial optionality and lowers refinancing risk over coming quarters.
Read all positive factors
Petco Health and Wellness Company (WOOF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$762.07M
Dividend YieldN/A
Average Volume (3M)3.37M
Price to Earnings (P/E)82.9
Beta (1Y)1.85
Revenue Growth-3.85%
EPS Growth97.87%
CountryUS
Employees29,000
SectorConsumer Cyclical
Sector Strength84
IndustrySpecialty Retail
Share Statistics
EPS (TTM)0.06
Shares Outstanding246,564,870
10 Day Avg. Volume3,155,590
30 Day Avg. Volume3,367,994
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 Cap4.45
Enterprise Value/Revenue0.57
Enterprise Value/Gross Profit1.47
Enterprise Value/Ebitda10.59
Forecast
1Y Price Target
$3.84Price Target Upside43.28% Upside
Rating ConsensusHold
Number of Analyst Covering10
EPS Forecast (FY)0.2
Revenue Forecast (FY)$6.00B
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 heal...
How the Company Makes Money
Petco primarily makes money by selling pet products and pet services across its store base and e-commerce channels. The largest revenue driver is merchandise sales—especially consumables such as pet food and treats—supplemented by sales of hard go...
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 Earnings Call Summary
Earnings Call Date:Mar 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 27, 2026
Earnings Call Sentiment Positive
The call highlighted a decisive and measurable turnaround in 2025 with meaningful margin expansion, strong EBITDA and cash-flow improvement, balance sheet repair, and a clear multi-pillar growth strategy for 2026. Top-line trends remain modest and many growth initiatives are early in execution, leaving near-term revenue growth dependent on disciplined inventory reinvestment, successful product and services rollouts, and manageable macro headwinds (tariffs, fuel). Overall, the fundamentals and strategic plan present a favorable trajectory, but execution and macro variability will determine the pace of revenue recovery.Positive Updates
Significant Profitability and Cash Flow Improvement
Full-year adjusted EBITDA increased 21.3% to $408.0M (6.8% margin); operating profit improved by $100.0M and operating margin expanded 190 bps year-over-year. Free cash flow improved 276% to $187.0M and operating cash flow rose ~77%.
Negative Updates
Top-Line Weakness and Negative Comps in Q4
Q4 net sales declined 2.4% to $1,520.0M with comp sales down 1.6%, reflecting management's deliberate shift away from unprofitable sales and ongoing top-line pressure.
Read all updates
Q4-2025 Updates
Positive
Negative
Significant Profitability and Cash Flow Improvement
Full-year adjusted EBITDA increased 21.3% to $408.0M (6.8% margin); operating profit improved by $100.0M and operating margin expanded 190 bps year-over-year. Free cash flow improved 276% to $187.0M and operating cash flow rose ~77%.
Read all positive updates
Company Guidance
Petco guided Q1 net sales down 1% to flat with comp sales roughly flat at the midpoint and Q1 adjusted EBITDA of $92–$94 million (assuming fuel normalizes by the end of the quarter), and for fiscal 2026 expects net sales flat to up 1.5% with net store closures of 15–20 (weighted to the back half), a roughly 50‑bp full‑year spread between total sales and comps (implying positive comps), and adjusted EBITDA of $415–$430 million; management also modeled net interest expense of about $125 million, capital expenditures of roughly $140 million (with ongoing ROIC focus), depreciation & amortization near $200 million, and stock‑based compensation up a low‑double‑digit percent year‑over‑year, while noting they will invest inventory behind growth but keep inventory growth at or below sales growth.Petco Health and Wellness Company Financial Statement Overview
Summary
Income Statement
34
Negative
Balance Sheet
40
Negative
Cash Flow
56
Neutral
| Breakdown | Jan 2026 | Jan 2025 | Jan 2024 | Jan 2023 | Jan 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.96B | 6.12B | 6.26B | 6.04B | 5.81B |
| Gross Profit | 2.31B | 2.32B | 2.35B | 2.43B | 2.43B |
| EBITDA | 317.14M | 7.05M | -971.83M | 407.75M | 452.22M |
| Net Income | 9.07M | -101.82M | -1.28B | 90.80M | 164.42M |
Balance Sheet | |||||
| Total Assets | 5.17B | 5.19B | 5.36B | 6.61B | 6.50B |
| Cash, Cash Equivalents and Short-Term Investments | 256.74M | 165.76M | 125.43M | 201.90M | 211.60M |
| Total Debt | 2.86B | 2.96B | 3.04B | 3.13B | 3.05B |
| Total Liabilities | 4.01B | 4.08B | 4.18B | 4.23B | 4.24B |
| Stockholders Equity | 1.16B | 1.11B | 1.18B | 2.38B | 2.27B |
Cash Flow | |||||
| Free Cash Flow | 186.95M | 49.68M | -9.88M | 67.98M | 119.11M |
| Operating Cash Flow | 314.05M | 177.67M | 215.72M | 346.00M | 358.21M |
| Investing Cash Flow | -124.56M | -123.90M | -207.44M | -320.32M | -237.08M |
| Financing Cash Flow | -101.75M | -8.75M | -85.35M | -33.84M | -18.78M |
Petco Health and Wellness Company Technical Analysis
Negative
2.68
Price Trends
2.72
Negative
2.86
Negative
3.10
Negative
Market Momentum
0.03
Positive
45.35
Neutral
4.51
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 2.68 is below the 20-day moving average (MA) of 2.83, below the 50-day MA of 2.72, and below the 200-day MA of 3.10, indicating a bearish trend. The MACD of 0.03 indicates Positive momentum. The RSI at 45.35 is Neutral, neither overbought nor oversold. The STOCH value of 4.51 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 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 |
|---|---|---|---|---|---|---|---|
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
54 Neutral | $762.07M | 82.95 | 0.79% | ― | -3.85% | 97.87% | |
53 Neutral | $395.09M | -38.47 | -34.47% | ― | -4.90% | 50.77% | |
52 Neutral | $10.78B | 52.77 | 51.43% | ― | 9.80% | -46.84% | |
51 Neutral | $23.76M | -15.12 | -3.23% | 25.20% | -5.07% | -115.50% | |
47 Neutral | $196.68M | 0.88 | -67.22% | ― | -8.07% | -2206.16% | |
46 Neutral | $88.46M | -3.00 | -35.90% | ― | -7.61% | -18.41% |
* Consumer Cyclical Sector Average
WOOF
Petco Health and Wellness Company
2.68
-0.28
-9.46%
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-48.40%
NHTC
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2.77
-1.56
-36.04%
CHWY
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-22.70%
BARK
BARK Inc Class A
0.51
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TDUP
thredUP
3.11
0.65
26.42%
Petco Health and Wellness Company Corporate Events
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Petco Highlights 2025 Profitability Gains Amid Sales Decline
Positive
Mar 12, 2026
On March 11, 2026, Petco reported fourth quarter and full year 2025 results showing lower sales but sharply improved profitability after an operational reset. For 2025, net sales fell 2.5% to $6.0 billion and comparable sales declined 1.6%, yet gr...
Business Operations and StrategyExecutive/Board ChangesPrivate Placements and Financing
Petco Completes Debt Refinancing, Strengthens Financial Flexibility
Positive
Feb 2, 2026
On January 30, 2026, Petco’s board appointed Executive Chairman Glenn Murphy to serve as non‑employee Chairman of the Board effective February 1, 2026, with Murphy receiving a small statutory lump-sum payment tied to his prior offer le...
Business Operations and StrategyPrivate Placements and Financing
Petco restructures debt with new loans and notes
Neutral
Feb 2, 2026
On February 2, 2026, Petco Health and Wellness Company, Inc. amended its first lien credit agreement to obtain $900 million in new refinancing term loans, which, together with cash on hand and the proceeds of a concurrent $600 million issuance of ...
Business Operations and StrategyPrivate Placements and Financing
Petco Prices $600 Million Senior Secured Notes Offering
Positive
Jan 23, 2026
On January 22, 2026, Petco Health and Wellness Company announced it had priced a $600 million offering of senior secured notes due February 1, 2031, carrying an interest rate of 8.25%, with the transaction expected to close on February 2, 2026 sub...
Business Operations and StrategyPrivate Placements and Financing
Petco Launches $650 Million Senior Secured Notes Offering
Positive
Jan 21, 2026
On January 21, 2026, Petco announced it had commenced an offering of $650 million in senior secured notes due 2031, guaranteed by subsidiaries that back its credit facilities and secured by first-lien interests on fixed assets and second-lien inte...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Petco Launches Major Debt Refinancing, Reaffirms 2025 Outlook
Positive
Jan 12, 2026
On January 12, 2026, Petco announced the launch of a debt refinancing transaction aimed at extending the maturities on $1.5 billion of its existing term loan, following a $50 million voluntary prepayment made in December 2025 and with the option t...
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.