Taking on analysts’ expectations and winning: Petco Health and Wellness Company Inc. (WOOF)

Petco Health and Wellness Company Inc. (NASDAQ: WOOF) stock fell -1.89% on Tuesday to $10.92 against a previous-day closing price of $11.13. With 1.53 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.46 million shares. During the session, the Specialty Retail company that operates in wider Consumer Cyclical sector, reached to the highest price of $11.20 whereas the lowest price it dropped to was $10.88. The 52-week range on WOOF shows that it touched its highest point at $22.75 and its lowest point at $8.72 during that stretch. It currently has a 1-year price target of $14.15.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of WOOF was up-trending over the past week, with a rise of 1.39%, but this was up by 18.44% over a month. Three-month performance surged to 16.67% while six-month performance fell -23.85%. The stock lost -39.20% in the past year, while it has gained 15.19% so far this year. A look at the trailing 12-month EPS for WOOF yields 0.33 with Next year EPS estimates of 0.72. For the next quarter, that number is 0.24. This implies an EPS growth rate of 806.60% for this year and -4.48% for next year. EPS is expected to grow by 48.80% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 36.10%.

Float and Shares Shorts:

At present, 265.69 million WOOF shares are outstanding with a float of 79.71 million shares on hand for trading. On Oct 13, 2022, short shares totaled 18.55 million, which was 6.98% higher than short shares on Sep 14, 2022. In addition to Mr. Ronald Coughlin Jr. as the firm’s Chairman & CEO, Mr. Brian LaRose serves as its Chief Financial Officer.


Institutional Ownership:

Through their ownership of 70.21% of WOOF’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 65.28% of WOOF, in contrast to 40.06% held by mutual funds. Shares owned by individuals account for 23.52%. As the largest shareholder in WOOF with 26.20% of the stake, Canada Pension Plan Investment Bo holds 59,765,368 shares worth 59,765,368. A second-largest stockholder of WOOF, Mackenzie Financial Corp., holds 7,894,396 shares, controlling over 3.46% of the firm’s shares. The Vanguard Group, Inc. is the third largest shareholder in WOOF, holding 6,956,874 shares or 3.05% stake. With a 1.55% stake in WOOF, the Ivy Mid Cap Growth Fund is the largest stakeholder. A total of 3,533,711 shares are owned by the mutual fund manager. The T Rowe Price Small Cap Value Fund, which owns about 1.20% of WOOF stock, is the second-largest Mutual Fund holder. It holds 2,741,237 shares valued at 25.99 million. Mackenzie US Mid Cap Opportunitie holds 1.19% of the stake in WOOF, owning 2,714,571 shares worth 25.73 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for WOOF since 14 analysts follow the stock currently. There are 6 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 5 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With WOOF analysts setting a high price target of $20.00 and a low target of $9.00, the average target price over the next 12 months is $14.15. Based on these targets, WOOF could surge 83.15% to reach the target high and fall by -17.58% to reach the target low. Reaching the average price target will result in a growth of 29.58% from current levels.


EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. WOOF will report FY 2023 earnings on 03/16/2023. Analysts have provided yearly estimates in a range of $0.77 being high and $0.75 being low. For WOOF, this leads to a yearly average estimate of $0.76. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Petco Health and Wellness Company Inc. surprised analysts by $0.00 when it reported $0.16 EPS against a consensus estimate of $0.16. The surprise factor in the prior quarter was -$0.03. Based on analyst estimates, the high estimate for the next quarter is $0.28 and the low estimate is $0.22. The average estimate for the next quarter is thus $0.24.

Summary of Insider Activity:

Insiders traded WOOF stock several times over the past three months with 11 Buys and 0 Sells. In these transactions, 630,519 shares were bought while 0 shares were sold. The number of buy transactions has increased to 36 while that of sell transactions has risen to 19 over the past year. The total number of shares bought during that period was 2,244,949 while 465,453 shares were sold.

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