Petco Health and Wellness Company

WOOF

Specialty Retail · Consumer Cyclical

Price

$2.66

-0.01 (-0.37%)

Market Cap

$759.6M

Exchange

NASDAQ

Winston Score

Winston is serious

Below-average fundamentals — multiple weak pillars.

Share count rising — dilution

+7.8% over 4y

The company has issued more shares over this period, which dilutes each existing shareholder’s stake.

Diluted shares outstanding: 265.3M (2022) → 286.1M (2026)

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 com

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-2.4% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+81.6% YoY

YoY Growth Rate

EPS growth accelerating

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

47.4%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Position

Cash flow positive

$257M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Revenue declining

Petco Health and Wellness Company's revenue is actually shrinking. In a growth stock, that removes the core investment thesis. The low Winston Score here may be warranted — unless there's a turnaround story.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

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Quality

Gross Margin

38.3%

Modest — 38.3% gross margin

Operating Margin

2.1%

Thin — 2.1% operating margin

ROCE

1.1%

Weak — 1.1% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

-2.9%

Shrinking sales (-2.9% YoY)

EPS YoY

N/A

—

Data not available

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

7483%

Turns 7483% of profit into real cash

FCF Margin

6.5%

Modest free cash flow (6.5%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

1.56

Elevated debt (1.56)

Interest Cover

0.98x

Dangerous — barely covers interest (1.0x)

Interest coverage below 1. Their profits don't cover the interest bill.

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Valuation

P/E Ratio (TTM)

110.4x

Expensive — P/E 110.4

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+99.8

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (110.4 → 10.5)

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Dividends

Not applicable for this business.

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