Update shared on30 Aug 2025
Fair value Increased 6.15%Analysts modestly raised Petco's price target to $3.91, citing early EBITDA and margin improvements from cost and operational initiatives, but remain cautious due to ongoing sales and traffic softness and long-term execution risks.
Analyst Commentary
- Bullish analysts point to encouraging early proof points and improving footing if positive trends persist, supported by initial Q1/Q2 improvements in EBITDA and earnings.
- Bearish analysts continue to highlight softness in same-store sales and customer traffic, expecting these pressures to persist near-term.
- Cost transformation and operational initiatives are showing incremental progress, leading to modest upward revisions in future EBITDA and EPS estimates.
- Despite some optimistic signals, analysts remain cautious, citing lingering risks of long-term market share erosion and uncertainty over execution of growth strategies.
- Improved EBIT margins and promising initiatives are noted, but long-term recovery requires significant operational execution and continued stabilization.
What's in the News
- Petco expects net sales to decline by low single digits year-over-year in both Q3 and full year 2025, reaffirming similar guidance for Q2.
- The company plans to close approximately 25 stores during 2025.
- Petco launched a new "My Human" product category, targeting pet-themed products for humans, expanding offerings both online and in select stores.
- A class action lawsuit was filed alleging false and misleading statements around business prospects, product strategy, and growth sustainability, following significant downward earnings revisions, leadership changes, and continued sales declines.
- Petco was added to multiple Russell growth and small cap benchmark indexes.
Valuation Changes
Summary of Valuation Changes for Petco Health and Wellness Company
- The Consensus Analyst Price Target has risen from $3.68 to $3.91.
- The Future P/E for Petco Health and Wellness Company has significantly risen from 41.99x to 50.85x.
- The Consensus Revenue Growth forecasts for Petco Health and Wellness Company has significantly fallen from 0.6% per annum to 0.5% per annum.
Disclaimer
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