Petco, one of our top IPO prospects in 2021, priced its shares at $14 to $17. Petco Health and Wellness Company, Inc expects to raise as much as $816 million in its initial public offering at a valuation of nearly $4 billion. It plans to sell 48 million shares and list on Nasdaq with the ticker “WOOF.”

Chewy, the online business of Petsmart, went public on June 14, 2019, at $22 per share.  As of this writing, Chewy has a $40.47 billion market capitalization or market cap.

Petco was a publicly traded firm until 2006 when the private equity firms CVC Capital Partners and Canadian Pension Plan Investment Board acquired the company and took it private.

Petco Fundamental Analysis

On December 3, 2020, the company filed its SEC S-1 Form, which required filing for companies that plan to go public.  In the form, Petco reported $4.43 billion in net sales for the 52 weeks ended February 1, 2020, with a net loss of nearly $104 million.

The net loss was nearly $300 million less than the net loss the company reported for the 52 weeks ended on February 2, 2019.

For that same period, there was an increase in adjusted EBITDA from $292.6 million to $335.7 million, representing period-over-period growth of 14.7%

The company claims to have over 21 million active customers, 1500 pet care centers, and over 23,000 knowledgeable and passionate partners.

Pet Industry

According to Petco’s S-1 Form, the industry serves more than 72 million households with pets and represents a total addressable market (TAM) of $97 billion in 2020.

Services, e-commerce, and veterinary are three of the fastest-growing areas of the market.

Petco Competitive Strengths

• Category-Defining Brand with Long-term Customer Relationship Built on Trust
• The Only-Integrated Comprehensive Offering of Pet Products and Services Nationwide
• Connected Ecosystem Combining Leading Digital Capabilities and Strategic Physical Network