Recently, the IPO (Initial Public Offering) market has become interesting to a large number of completely new investors who have not even been participants in the stock market. There is one big reason — profitability. The average return after the lock-up period is 40.5%, which corresponds to 162% annual in dollars (excluding commissions and personal income tax). In this article we will discuss the key details of Petco IPO: the history of the company, when is the Petco IPO date, Petco IPO price and everything you should know to make a decision whether to invest in it or not.
Petco History
You might have heard about Petco going public once before. Or even two times. Yes, the company is going through the IPO process for the third time in its history — since 1965.
Let’s start from the company’s founding until the Petco IPO release date. The company was founded in 1965 in San Diego, CA as a mail-order business selling veterinary supplies. By 1990 it became the largest pet specialty retailer in the US with more than 218 stores across 13 states. At this point it’s natural for a company to become public, so it held an IPO in 1994. It was successful and the company grew steadily for 6 years until the dot-com bubble of the 2000s. That year Petco went private in a leveraged buyout by Leonard Green Partners and Texas Pacific Group and a year later launched its first online shop Petco.com.
Surprisingly, in 2002 Petco IPO news came out and the company went public one more time, raised a lot of money and invested it in expansion. By the end of 2002 Petco had 600 stores in 48 states.
Their profitable and fast-growing business attracted attention from private equity investment groups, which bought out Petco in 2006.
The company changed its owners for the last time in 2015 and if you were wondering who owns Petco now — it is Canada Pension Plan Investment Board (CPP Investments) and private equity firm CVC Capital Partners.
The Petco’s core business is now far from just pet accessoires — they provide all pet-related services including pet adoption and vet help in some branches. The health department is one of the most successful and some mistakenly called for Petco Health IPO. Now the company has taken a trend for digitalisation. Their digital offerings and delivery advantages (Buy Online & Pick up in Store and Same Day Delivery) had 100% growth according to their 2020 report.
Some people might say the company had enough turns along the way, but apparently Petco likes having roadshows :) In 2020, following 9 subsequent quarters of sales growth and stellar 11% revenue growth in a year, the company’s management posed the question 'When is Petco going public?'
Talking about Petco IPO date and price...
Petco’s Public Listing Key Data and IPO Date
IPO Date: January 14, 2021
Ticket: WOOF
Exchange: NYSE
Share price: $18
Valuation at IPO: $4 billion
CEO: Ron Coughlin
Category: Retail Stocks
Method: IPO
The company has chosen to go public via traditional IPO and not via the popular Special Purpose Acquisition Company (SPAC), preferred by its competitor BarkBox.
IPO underwriters defined a price range between $14 and $17, but the demand at pre-IPO set the final price of $18 per share. At the beginning of the day on January 14, Petco IPO stock was traded at $26 per share and by the end of the day it cost $30.13 at max. So the stock saw an increase of 66% that day.
The good news is that the Petco stock price didn’t fall significantly after their IPO date unlike it’s competitor Barkbox. However, as of November 17, the Petco stock costs $25 and has a P/E ratio of 76 and an EPS of 0.33. Fundamental multiples are very high and indicate that the company is overvalued in comparison to other retailers like Walmart (P/E 40) and Target (P/E 21.26). Let’s see if it’s still worth investing after the Petco IPO 2021
So What About Investing Now?
Petco operates in more than 1,500 locations across the U.S., Mexico and Puerto Rico, including a growing network of more than 150 in-store veterinary hospitals.
Apparently, the Petco multiples are high but they might be reasonably high as the company has been heavily investing in building e-commerce platforms. So instead of seeing it as a regular value retailer, it seems to be more of a growth company. In the past 3 years Petco spent $150 million in building its digital presence. It offers a complete online resource for pet health and wellness at petco.com and in the Petco app.
Such well-timed investment helped the company thrive through the pandemic since American families added over three million pets to their households in 2020. All of these fluffy miracles needed to be taken care of with food, supplies, toys, and other goods and services. That’s why the company has seen a 19% growth in revenue and earnings in 2021.
The pet care market is not crowded yet, but has some tight competition between Petco, Chewy, Barkbox and others. Despite this, Petco has an unrivaled advantage of providing essential offline services like grooming, dog training and vet. Even if there were more competitors, the market still has great potential. According to Euromonitor International, the size of the global pet care market surpassed $120 billion in 2019, with spending in the U.S. growing to more than $50 billion. Petco reported $1.4 billion in revenue in Q2 2021.
FAQ
Is Petco a public company?
The company has gone public and private again 3 times in its history since 1965. The last time Petco became publicly traded was on January 14, when it had an IPO on the NYSE.
How much is Petco worth?
At the Petco IPO date the company’s valuation was about $4.6 billion as it raised $864 million by selling 48 million shares at $18 per share. As of November 2021, Petco’s market cap is $7.5 billion and the share price is $25.
What is Petco’s stock symbol?
It’s quite funny to find out that Petco’s stock symbol is ‘WOOF’. Something so obvious, yet surprising. You will definitely understand what the company does by it… Unlike some Alphabets :)
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