Petco Health and Wellness Company (WOOF) AI Stock Analysis

• Market Cap: $734.05M
• Dividend Yield: N/A
• Average Volume (3M): 1.67M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.88
• 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: 1,691,979
• 30 Day Avg. Volume: 1,665,168
• 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: 2.57
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 0.83
• Enterprise Value/Ebitda: 6.09
• 1Y Price Target: $3.55
• Price Target Upside: 36.54% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $2.50 ▼(-3.85% Downside)

The score is held back primarily by weak financial profitability (losses and negative ROE) and bearish technicals (below key moving averages with negative MACD). These are partially offset by improving cash flow and leverage trends, plus a more positive earnings-call outlook driven by higher adjusted EBITDA guidance and strong recent free cash flow, supported by refinancing actions to improve financial flexibility.

Positive Factors

Services segment growth

Services (grooming, vet) are expanding fastest, creating recurring, higher-margin revenue and strong customer stickiness. This diversifies the retail-heavy model, raises switching costs, enables cross‑sell of products and insurance, and supports durable margin improvement and customer lifetime value.

Improving free cash flow

A >100% TTM rise in free cash flow signals materially stronger cash generation, which funds capital allocation, deleveraging and reinvestment without relying on equity. Steady FCF improves financial resilience versus peers and enables strategic flexibility across 2–6 month horizons and beyond.

Debt refinancing extends maturities

Completed refinancing reshapes the capital structure by extending maturities and raising liquidity, reducing near-term rollover risk. Even if coupon costs are elevated, a reprofiled debt ladder and improved covenant package enhance capacity to execute operational turnarounds and sustain investments.

Negative Factors

Top-line contraction

Nearly 8% TTM revenue decline reflects structural softness that erodes scale and limits leverage on fixed costs. Persistent top-line pressure constrains margin recovery, capital returns and reinvestment, making durable profit improvement dependent on reversing sales trends or extracting more productivity.

Negative profitability metrics

A negative net margin and ROE indicate the business presently fails to generate returns on equity despite operational improvements. Sustained shareholder value creation requires consistent operating income expansion and conversion to positive net earnings, which remains an ongoing structural challenge.

High-cost secured debt and covenants

Issuing high‑coupon secured notes and restrictive loan terms raises fixed interest expense and imposes covenants that limit capital allocation, dividends and M&A. With weak sales, elevated financing costs increase refinancing risk and constrain strategic flexibility over the medium term.

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

Financials are mixed: the company remains unprofitable (TTM net margin -0.04% and negative ROE -0.19%) and revenue is down 7.78% TTM, but gross margin is relatively stable (~38.57%), leverage has improved (debt-to-equity down to 1.20 from 2.66), and cash generation is notably better (TTM free cash flow growth 120.89%).

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: 2.60
• 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 2.6 is below the 20-day moving average (MA) of 2.88, below the 50-day MA of 2.96, and below the 200-day MA of 3.20, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 33.52 is Neutral, neither overbought nor oversold. The STOCH value of 14.30 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%
CHWY	61 Neutral	$11.44B	56.91	59.58%	―	9.80%	-46.84%
WOOF	51 Neutral	$734.05M	-241.67	-0.19%	―	-3.85%	97.87%
TDUP	51 Neutral	$598.18M	-15.35	-35.37%	―	-4.90%	50.77%
FLWS	50 Neutral	$262.67M	-1.22	-67.22%	―	-8.07%	-2206.16%
BARK	50 Neutral	$143.85M	-4.10	-33.59%	―	-7.61%	-18.41%
NHTC	48 Neutral	$46.05M	-52.15	-0.38%	25.20%	-5.07%	-115.50%

Petco Health and Wellness Company Corporate Events

Petco Completes Debt Refinancing, Strengthens Financial Flexibility

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 letter and remaining eligible for a fiscal 2025 bonus. In a February 2, 2026 press release, the company also announced the successful closing of its previously disclosed long‑term debt refinancing, which management said has strengthened Petco’s economic model, improved profitability and cash flow, and is expected to reduce leverage and provide greater financial flexibility, reinforcing the retailer’s efforts to reset its capital structure and board leadership as it pursues its next phase of growth under CEO Joel Anderson and Murphy in his new governance-focused role.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

Petco restructures debt with new loans and notes

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 8.250% senior secured notes due 2031, were designated to repay its existing term loan facility and adjust its capital structure. The new term loans, bearing interest at a margin of 4.25% over a term benchmark rate (or an alternative base rate plus 3.25%), include a six‑month 1% soft call premium, 1% annual amortization, and a five‑year maturity, while the newly issued notes are governed by an indenture that imposes restrictive covenants on additional indebtedness, dividends, asset sales, liens, affiliate transactions, and certain corporate restructurings, with defined redemption options and change‑of‑control protections, collectively reshaping the company’s debt profile and tightening operating and financing flexibility for stakeholders.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

Petco Prices $600 Million Senior Secured Notes Offering

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 subject to customary conditions. The notes, guaranteed by Petco’s credit-facility guarantor subsidiaries and secured by first-lien interests in fixed assets and second-lien interests in current assets, will rank ahead of the company’s unsecured and junior-lien debt to the extent of the collateral, while remaining effectively subordinated to certain other secured obligations, and the proceeds, alongside a new term loan and cash on hand, are earmarked to refinance Petco’s existing term loan facility, cover related fees and bolster general corporate liquidity, signaling a significant move to reprofile its capital structure and manage its debt obligations.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

Petco Launches $650 Million Senior Secured Notes Offering

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 interests on current assets. The company plans to use the proceeds, together with borrowings under a new term loan and cash on hand, to fully repay its existing term loan facility, cover related fees and expenses, and fund general corporate purposes, a move that is set to reshape its debt profile by replacing existing financing with a new mix of secured notes and loan funding aimed at strengthening its capital structure and financial flexibility for stakeholders.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

Petco Launches Major Debt Refinancing, Reaffirms 2025 Outlook

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 to make further prepayments under a $100 million board authorization, signaling an effort to optimize its capital structure amid ongoing market uncertainty. In connection with the refinancing, the company reaffirmed its guidance for the fourth quarter and full fiscal year 2025 ending January 31, 2026, projecting net sales to decline 2.5%–2.8% for the year with low single-digit declines in the fourth quarter and forecasting Adjusted EBITDA of $395 million–$397 million for fiscal 2025 and $93 million–$95 million for the quarter, underscoring management’s confidence in operational performance and category resilience despite softer top-line trends.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.

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.

The most recent analyst rating on (WOOF) stock is a Hold with a $3.00 price target. To see the full list of analyst forecasts on Petco Health and Wellness Company stock, see the WOOF Stock Forecast page.