Jefferies Reiterates Hold Rating on Petco Health and Wellness Company, Keeps PT at $4.15

Core Insights - Petco Health and Wellness Company, Inc. (NASDAQ:WOOF) is recognized as one of the 12 best NASDAQ penny stocks to buy according to hedge funds [1] - Jefferies has reiterated a Hold rating on Petco, maintaining a price target of $4.15 [1][3] - The company reported Q2 FY2025 revenue of $1.5 billion, which aligns with estimates and reflects a year-over-year increase of 2.3% [2] - Operating income increased significantly by $40.6 million to reach $43 million compared to the previous year [3] - Adjusted EBITDA rose by $30.3 million to $113.9 million, indicating strong operational performance [3] - The average price target for Petco is $4, suggesting an upside potential of nearly 15.61% from current levels [4] Financial Performance - Revenue for Q2 FY2025 was $1.5 billion, consistent with estimates and up 2.3% year-over-year [2] - Operating income increased to $43 million, a rise of $40.6 million from the previous year [3] - Adjusted EBITDA reached $113.9 million, up by $30.3 million, showcasing robust operational performance [3] Strategic Insights - E-commerce is becoming more profitable for Petco, with ongoing transformation efforts [2] - Inventory control is improving, balancing customer needs effectively [2]