Petco Health (WOOF) Plunges 5.07% as Weak Earnings and Market Volatility Spark Sell-Off

Petco Health and Wellness (WOOF) plunged 5.07% in pre-market trading on November 18, 2025, as investors digested weak earnings and broader market volatility. The stock, which has underperformed its sector in recent months, faces renewed pressure amid concerns over profitability and debt levels.

Recent financial reports highlighted a net loss of $28.2 million in the trailing twelve months, with a negative profit margin of -0.47%. Analysts remain divided, though RBC Capital recently reiterated an “Outperform” rating with a $4 price target. Despite a 12.26 EV/EBITDA ratio, Petco’s high debt-to-equity of 258.34% and levered free cash flow of $88.42 million raise questions about sustainability. The stock’s 52-week range of $2.28–$6.29 suggests a volatile outlook.

Broader market trends, including a -0.31% decline in S&P 500 futures, may have amplified the sell-off. Petco’s beta of 1.71 indicates heightened sensitivity to market swings, compounding risks for short-term traders.

Technical indicators for WOOF have shown bearish patterns in recent weeks, with price action forming a bearish Engulfing pattern on the daily chart. These signals, combined with weak fundamentals, have led some traders to adopt short-term hedging strategies.

Backtest assumptions suggest a bearish short-term bias for WOOF, given its weak fundamentals and technical indicators. A strategy targeting price dips below $2.75 with a stop-loss at $2.50 could capitalize on near-term volatility. Long-term investors might monitor earnings on November 25 for signs of stabilization.