MeritValue

Petco Health & Wellness Company, Inc.

WOOFdata completeness 100%7 fiscal years on file
The thesis, from the filings

Petco Health & Wellness Company, Inc. earns about -6% on invested capital, but has diluted owners by 107743% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $0.33 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2022FY 2023FY 2024FY 2025FY 2026
Revenue$5.81B1$6.04B2$6.26B3$6.12B3$5.96B3
Net income$164.4M4$90.8M5−$1.28B6−$101.8M6$9.07M6
Operating cash flow$358.2M7$346M8$215.7M9$177.7M9$314.1M9
Capital expenditure$239.1M10$278M11$225.6M12$128M12$127.1M12
Free cash flow (derived)$119.1M7$68M8−$9.88M9$49.7M9$187M9
Total debt$1.64B13$1.63B14$1.58B15$1.58B16$1.49B16
Cash & equivalents$211.6M17$201.9M18$125.4M19$165.8M20$256.7M20
Diluted shares265,338266.0M267.5M273.4M286.1M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$40.69
your share of equity
Profit it earned you last year
$0.32
Free cash flow it threw off
$6.53
Debt you’d be carrying
$52.02

10 shares is a claim on $40.69 of net worth that earned you $0.32 and generated $6.53 of cash last year, against $52.02 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
-6% avg · 5y
FY22 6%FY23 4%FY24 -35%FY25 -3%FY26 0%

It earned an average -6% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+107743% shares · 5y

Share count is up 107743% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$49.7M
DCF · Growth Exit 5Y
not applicable
negative equity value — refusing to publish per-share figure
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$49.7M
Earnings Power Value
$0.33
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$9.07M
  • growthAssumed0.0%
Graham Number
$1.66
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2022-01-29 · accession 0000950170-24-040516 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2023-01-28 · accession 0000950170-25-047693 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2024-02-03 · accession 0001193125-26-106114 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2022-01-29 · accession 0000950170-24-040516 (NetIncomeLoss)
  5. 10-K · period ending 2023-01-28 · accession 0000950170-25-047693 (NetIncomeLoss)
  6. 10-K · period ending 2024-02-03 · accession 0001193125-26-106114 (NetIncomeLoss)
  7. 10-K · period ending 2022-01-29 · accession 0000950170-24-040516 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2023-01-28 · accession 0000950170-25-047693 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2024-02-03 · accession 0001193125-26-106114 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2022-01-29 · accession 0000950170-24-040516 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2023-01-28 · accession 0000950170-25-047693 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2024-02-03 · accession 0001193125-26-106114 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2022-01-29 · accession 0000950170-23-010285 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2023-01-28 · accession 0000950170-24-040516 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-02-03 · accession 0000950170-25-047693 (LongTermDebtNoncurrent)
  16. 10-K · period ending 2025-02-01 · accession 0001193125-26-106114 (LongTermDebtNoncurrent)
  17. 10-K · period ending 2022-01-29 · accession 0000950170-23-010285 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-01-28 · accession 0000950170-24-040516 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-02-03 · accession 0000950170-25-047693 (CashAndCashEquivalentsAtCarryingValue)
  20. 10-K · period ending 2025-02-01 · accession 0001193125-26-106114 (CashAndCashEquivalentsAtCarryingValue)