One-glance verdict
Within fair range
$-0.08 our estimate vs market $2.33
Wall Street consensus: $3.47 (-4,332.4% lower than our fair-value estimate)
2943% below our estimate
Fundamentals snapshot
Petco Health and Wellness Company, Inc.
WOOF · NMS · Consumer Cyclical · Specialty Retail
Current price
$2.33
52-week range
$2.14 - $3.87
Market cap
$667.36M
Balance sheet
Distressed
0.92x Concerning
Net debt $2.53B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 0.1% last year.
- Reward Returns 2.6% on equity, ahead of 33% of its peers.
- Risk Insider ownership is only 3.3% (peer median: 15.7%).
- Risk Operating margin compressed from 3.7% to 3.2% over 3 years.
What this company does
Petco Health and Wellness Company, Inc.
Petco is a company that sells everything pets need, like food, toys, and even vet care, making most of its money from selling these products and services directly to pet owners. This is important because it shows how much people are willing to spend on their furry friends, which can affect Petco's profits and its ability to grow.
How the company got here
Petco Health and Wellness Company, Inc. started in 1965 as a mail-order veterinary supply business. Over the decades, it grew into a national chain of pet stores, undergoing several changes in ownership and public trading status. A significant shift occurred around 2020 when the company rebranded from "Petco Animal Supplies" to "Petco Health and Wellness," signaling a strategic move to focus more on the overall health and well-being of pets, rather than just selling products. This repositioning aimed to differentiate itself in a competitive market by emphasizing services and a holistic approach to pet care. The company returned to public markets in 2021.
What it actually does
Petco operates as a specialty retailer for pet products and services. Think of it as a one-stop shop for everything a pet owner might need. This includes a wide variety of pet food, treats, toys, bedding, and other supplies. Beyond just products, Petco offers a range of services designed to keep pets healthy and happy, such as grooming, training classes, and veterinary care. They also sell companion animals like fish and small animals. Petco reaches customers through its physical stores across the United States, Mexico, and Puerto Rico, as well as through its website and mobile app.
Consumables
This is Petco's largest business line, making up about half of its total revenue. It's essentially all the things pets eat and use regularly. This category includes a wide array of pet foods (dry kibble, wet food, specialized diets), treats, and essential items like cat litter. These are the products that pet owners tend to buy repeatedly, making this segment a consistent driver of store traffic and customer loyalty. Petco focuses on offering both well-known national brands and its own private-label brands within this segment.
Supplies and Other
This segment covers a broad range of non-food items that pets need. It includes everything from toys and bedding to grooming tools, leashes, collars, and habitats for smaller animals like fish and reptiles. While not as large as the consumables business, this category is crucial for providing a complete offering to pet owners. Petco also includes its own branded products in this segment, aiming to offer unique items that cater to various pet needs and owner preferences.
Services and Veterinary Care
This is a key growth area for Petco, focusing on the health and wellness aspect of pet ownership. It encompasses services like professional grooming, obedience training classes for dogs, and a network of in-store veterinary clinics and hospitals (known as Vetco Total Care). These services are designed to be convenient for pet owners and to foster deeper, ongoing relationships with customers. By offering these health-focused services, Petco aims to be more than just a retailer, positioning itself as a comprehensive partner in a pet's life.
What management is betting on now
Petco's current strategy is centered on strengthening its position as a health and wellness destination for pets. Management is focused on growing recurring revenue streams, particularly from consumables and membership programs like Vital Care, which bundle services and offer benefits to loyal customers. They are also investing in expanding their services, especially veterinary care, to create a more integrated ecosystem. The goal is to build stronger customer relationships, increase the amount each customer spends over time (known as customer lifetime value), and ensure profitable growth by executing well across both their retail and service operations.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q4
$-10.29M
FY2026 Q1
$59.04M
FY2026 Q2
$-43.87M
FY2026 Q3
$53.79M
FY2026 Q4
$60.65M
FY2027 Q2
$-69.12M
FY2027 Q3
$129.92M
Revenue
$1.49B
Net income
$38.66M
Diluted EPS
0.13
Operating cash flow
$161.55M
Free cash flow
$129.92M
Fetching…
Sources
Revenue
$1.50B
Net income
$-15.15M
Diluted EPS
-0.05
Operating cash flow
$-30.97M
Free cash flow
$-69.12M
Fetching…
Sources
Revenue
$1.46B
Net income
$9.33M
Diluted EPS
0.03
Operating cash flow
$90.09M
Free cash flow
$60.65M
Fetching…
Sources
Revenue
$1.49B
Net income
$13.97M
Diluted EPS
0.05
Operating cash flow
$85.89M
Free cash flow
$53.79M
Fetching…
Sources
Revenue
$1.49B
Net income
$-11.66M
Diluted EPS
-0.04
Operating cash flow
$-15.45M
Free cash flow
$-43.87M
Fetching…
Sources
Revenue
$1.55B
Net income
$-13.84M
Diluted EPS
-0.05
Operating cash flow
$95.99M
Free cash flow
$59.04M
Fetching…
Sources
Revenue
$1.51B
Net income
$-16.67M
Diluted EPS
-0.06
Operating cash flow
$20.72M
Free cash flow
$-10.29M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-0.08 vs current price $2.33
Wall Street consensus is the average analyst price target: $3.47 (-4,332.4% lower than our fair-value estimate).
Our most-likely fair value is $-0.08 a share — about 103.5% away from today's price of $2.33, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $2.5B. Interest coverage 0.9x.
Net debt
$2.53B
Interest coverage
0.92x
Petco Health and Wellness Company, Inc.'s profit covers its interest bill about 0.9 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
WOOF
BASELINE
Petco Health and Wellness Company, Inc.
Total debt $2.82B Interest coverage 0.92x This is the baseline the peer rows are being compared against.
Total debt $1.16B Interest coverage 55.28x +5,922% vs WOOF Carries about 60.2x more debt cushion than WOOF.
Total debt $414.00K Interest coverage -69.81x -100% vs WOOF This peer has almost no interest-payment cushion compared with WOOF.
Total debt $36.23M Interest coverage -21.65x -100% vs WOOF This peer has almost no interest-payment cushion compared with WOOF.
Total debt $493.66M Interest coverage 5.36x +484% vs WOOF Carries about 5.8x more debt cushion than WOOF.
Total debt $106.91M Interest coverage 7.32x +697% vs WOOF Carries about 8.0x more debt cushion than WOOF.
What you should know
The case for and against WOOF
3 Rewards
2 Risks
Rewards
-
Revenue grew 0.1% last year.
-
Returns 2.6% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Insider ownership is only 3.3% (peer median: 15.7%).
-
Operating margin compressed from 3.7% to 3.2% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
23.30x
Forward P/E
8.71x
P/B
0.55x
P/S
0.11x
EV/EBITDA
9.61x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
38.8%
Operating margin
3.2%
Net margin
0.5%
ROE
2.6%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
2.34x
Current ratio
0.90x
Quick ratio
0.28x
Total debt
$2.82B
Total cash
$293.77M
Growth
How the business has been compounding
Revenue TTM
$5.97B
Revenue 5Y CAGR
0.7%
EPS TTM
0.10
EPS 5Y CAGR
-55.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$374.20M
Free CF TTM
$186.95M
FCF margin
3.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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