Why Petco Stock Is Soaring Today

Actions of Petco Health and Wellness Company (NASDAQ: WOOF) have soared 29.6% since 11:29 a.m. ET Wednesday. The big gain came after the pet retailer announced its second-quarter results after the market closed on Tuesday.

Petco reported Q2 net income of $1.52 billion, down 0.5% year over year. The company posted a net loss based on generally accepted accounting principles (GAAP) of $24.8 million, or $0.09 per share. Adjusted net loss was $5.9 million, or $0.02 per share, which was in line with analysts’ average estimate.

The company is looking for third-quarter 2024 net income of about $1.5 billion, slightly below the consensus estimate of $1.51 billion. It expects adjusted loss per share between $0.03 and $0.04. Analysts project an adjusted loss of $0.03 per share in Q3.

Why Is Petco Stock Soaring?

You might be wondering why Petco stock is soaring after delivering mixed Q2 results and Q3 guidance that came in slightly below expectations. The short answer is that investors liked what they heard in the company’s earnings call.

New CEO Joel Anderson pledged to improve profitability. He told analysts on the conference call that the management team has “put together an excellent strategy on how to get this company back to excellent footing in terms of EBITDA (earnings before interest, taxes, depreciation and amortization) performance.” “. Anderson mentioned several components of this strategy, including exercising more discipline in merchandising and improving supplier partnerships.

Is Petco stock a good choice to buy?

Aggressive investors who like turnaround plays may find Petco stock an attractive pick. Anderson brings a strong background to the table with his experience as CEO of Five below and Walmarthis internet business. If he leads the company in the right execution of its profitability strategy, the stock should continue its recent momentum.

Should You Invest $1,000 in Petco Health and Wellness Right Now?

Before you buy stock in Petco Health and Wellness, consider the following:

The Motley Fool Stock Advisor the analyst team has just identified what they think they are 10 best stocks for investors to buy now… and Petco Health and Wellness was not one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you would have $662,392!*

Stock advisor provides investors with an easy-to-follow blueprint for success, including portfolio construction guidance, regular updates from analysts, and two new stock picks every month. The Stock advisor the service has more than four times return of the S&P 500 since 2002*.

The story continues

See the 10 stocks »

*The stock advisor returns starting September 9, 2024

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Five Below. The Motley Fool has a disclosure policy.

Why Petco Stock Is Soaring Today was originally published by The Motley Fool