Shareholders might have noticed that Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) filed its third-quarter result this time last week. The early response was not positive, with shares down 4.2% to US$4.71 in the past week. Revenue hit US$1.5b in line with forecasts, although the company reported a statutory loss per share of US$0.06 that was somewhat smaller than the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following last week's earnings report, Petco Health and Wellness Company's 13 analysts are forecasting 2026 revenues to be US$6.27b, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 85% to US$0.061. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$6.30b and losses of US$0.091 per share in 2026. Although the revenue estimates have not really changed Petco Health and Wellness Company'sfuture looks a little different to the past, with a considerable decrease in the loss per share forecasts in particular.
The average price target rose 20% to US$4.65, with the analysts signalling that the forecast reduction in losses would be a positive for the stock's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Petco Health and Wellness Company at US$6.00 per share, while the most bearish prices it at US$1.50. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Petco Health and Wellness Company's revenue growth is expected to slow, with the forecast 0.5% annualised growth rate until the end of 2026 being well below the historical 7.4% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Petco Health and Wellness Company is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
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. At Simply Wall St, we have a full range of analyst estimates for Petco Health and Wellness Company going out to 2027, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 2 warning signs for Petco Health and Wellness Company 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.
