Yahoo Finance Earnings Release: Here's Why Analysts Cut Their Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) Price Target To US$3.00
It's been a mediocre week for Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) shareholders, with the stock dropping 14% to US$1.95 in the week since its latest annual results. The statutory results were not great - while revenues of US$6.3b were in line with expectations,Petco Health and Wellness Company lost US$4.78 a share in the process. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
See our latest analysis for Petco Health and Wellness Company
Following last week's earnings report, Petco Health and Wellness Company's 15 analysts are forecasting 2025 revenues to be US$6.13b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 96% to US$0.21. Before this latest report, the consensus had been expecting revenues of US$6.13b and US$0.24 per share in losses. While the revenue estimates were largely unchanged, sentiment seems to have improved, with the analysts upgrading their numbers and making a notable improvement in losses per share in particular.
Even with the lower forecast losses, the analysts lowered their valuations, with the average price target falling 7.7% to US$3.00. It looks likethe analysts have become less optimistic about the overall business. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Petco Health and Wellness Company analyst has a price target of US$6.00 per share, while the most pessimistic values it at US$1.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Petco Health and Wellness Company's past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 2.0% annualised decline to the end of 2025. That is a notable change from historical growth of 8.6% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 5.0% annually for the foreseeable future. It's pretty clear that Petco Health and Wellness Company's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Petco Health and Wellness Company's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Petco Health and Wellness Company's future valuation.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Petco Health and Wellness Company analysts - going out to 2027, and you can see them free on our platform here.
Even so, be aware that Petco Health and Wellness Company is showing 1 warning sign in our investment analysis , you should know about...
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
