Petco $WOOF Bounces on CEO Buying and New Partnerships Is This the Comeback Investors Have Been Waiting For?

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•  01 May 2025
 

Petco Health and Wellness ($WOOF) is beginning to catch the attention of traders once again. After spending months in the penalty box, the stock closed Thursday’s regular session at $3.01, up over 2%, riding a fresh wave of insider buying, renewed growth initiatives, and a shift in sentiment surrounding its longer-term viability. With the after-hours market now humming quietly, investors are wondering—has $WOOF finally found its footing?

Let’s dig deeper.

Petco is not just another pet retailer. It’s a legacy brand that has undergone a significant transformation in recent years, transitioning from a traditional brick-and-mortar chain into a health and wellness company for pets. That rebranding isn't just semantics—it's backed by a broader push toward veterinary services, grooming, digital e-commerce, and wellness-oriented products.

The company’s partnership with plant-powered insect repellent maker Wondercide is a great example of its shifting identity. With demand for natural products booming, Petco has expanded Wondercide’s distribution to 1,400 stores. This isn't just about selling bug spray—it’s about selling trust, brand alignment, and values that matter to millennial and Gen Z pet owners, who are now the dominant cohort of pet parents in the U.S.

The market loves when insiders buy stock—and for good reason. When a CEO opens their wallet, it's often a sign that better days lie ahead. This week, Petco’s CEO did just that, buying up shares in a public display of confidence. It’s hard to overstate the impact this has on sentiment, especially for a company that’s trading near its 52-week low of $1.53.

As the old saying goes, there are a hundred reasons to sell a stock, but only one to buy—you think it’s going up.

Let’s talk brass tacks. Petco is currently trading at $3.01, far from its 52-week high of $6.29. The market cap sits just under $950 million, a shadow of its pandemic-era valuation. While the company posted a net loss in Q4, reporting GAAP EPS of -$0.05 (missing estimates by $0.03), revenue came in at $1.55 billion—only a slight miss.

More important than the quarterly miss was the forward guidance. Petco has outlined an adjusted EBITDA target of $375M–$390M for FY2025 and is laser-focused on cost control. This tells us management is actively steering the ship away from margin erosion and toward sustainable profitability.

That’s key in today’s retail environment, where execution matters more than ever.

The Qualitative Side: Leadership, Strategy & Brand Equity
On the qualitative front, Petco’s reorientation toward a services-first, health-and-wellness strategy positions it well against competitors like Chewy ($CHWY) and traditional retailers. Petco has something they don’t—physical locations for in-person services. This omnichannel model is increasingly attractive as customers return to in-store experiences post-pandemic.

Brand reputation still holds strong. Despite the noise in its financials, Petco remains a trusted name. That’s a competitive advantage you can’t quantify on a balance sheet, but it matters—especially in a market where trust is currency.

Moreover, recent headlines signal strategic momentum. Petco’s expansion on platforms like Uber Eats makes pet essentials more accessible and aligns with consumer behavior shifts toward convenience and on-demand delivery. It’s a smart pivot and a subtle but meaningful indicator of agility at the executive level.

Trend Analysis: Is the Bottom In?
From a technical standpoint, $WOOF has started to build a base around the $2.80–$3.00 range with relatively strong volume on up days. The fact that it’s showing resilience here—despite a negative EPS and broader market volatility—is a sign of early accumulation.

The 52-week low at $1.53 is fresh enough in investors’ minds to act as a psychological backstop. If the stock breaks above $3.25 with conviction, traders may start eyeing the $4.00–$4.25 level as the next resistance. That’s not speculation—it’s based on historical price clusters and option activity, which showed notable call buying this week.

Risks That Can’t Be Ignored
Petco isn’t out of the woods. The company still carries debt, faces stiff competition from digital-first platforms like Chewy, and operates in a retail environment that remains under pressure due to inflation and changing consumer habits. EPS remains negative, and its PE ratio is technically undefined due to losses.

In other words: this is not a “safe” play. But it might just be a smart one—for the right kind of investor.

Bottom Line
If you’re a risk-tolerant trader looking for asymmetric upside, $WOOF might offer one of the more intriguing setups on the board right now. CEO buying, a shift toward higher-margin services, and evolving distribution partnerships paint a picture of a company fighting back—and winning some early rounds.

Near-Term Opportunity: $WOOF is one of the few small-caps showing technical and sentiment momentum into the weekend. Watch closely for volume confirmations above $3.25 in early next-week trading.

Long-Term Potential: If management can deliver on 2025 EBITDA goals and restore profitability, the stock could re-rate significantly. Its unique hybrid model of wellness services and retail gives it a niche that few can replicate.

As always, size your positions wisely—but keep $WOOF on your radar. This underdog may have more bark and bite than most expect.