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Petco (WOOF) Stock Latest 17.9% Rally Spikes Hope for Big Short Squeeze

Summary:
The WOOF stock surge might also have been attributed to the announcement that Petco would virtually present at the Evercore ISI Consumer & Retail Summit.Petco Health and Wellness Co Inc (NASDAQ: WOOF) stock closed at .41 (-9.41%) on June 16, at 4.20 a.m. EDT and was trading at .22, with a 0.75% fall in the pre-market session.This comes just a day after $WOOF stock rose 17.9% as it was one of the trending stocks among Reddit’s retailers. The company saw about 43 million shares exchange hands Monday, marking the second-highest Daily Trading Volumes for the stock since its January IPO. The surge might also have been attributed to the announcement that the company would virtually present at the Evercore ISI Consumer & Retail Summit.WOOF has also been a trending ticker due to the

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The WOOF stock surge might also have been attributed to the announcement that Petco would virtually present at the Evercore ISI Consumer & Retail Summit.

Petco Health and Wellness Co Inc (NASDAQ: WOOF) stock closed at $25.41 (-9.41%) on June 16, at 4.20 a.m. EDT and was trading at $25.22, with a 0.75% fall in the pre-market session.

This comes just a day after $WOOF stock rose 17.9% as it was one of the trending stocks among Reddit’s retailers. The company saw about 43 million shares exchange hands Monday, marking the second-highest Daily Trading Volumes for the stock since its January IPO.

The surge might also have been attributed to the announcement that the company would virtually present at the Evercore ISI Consumer & Retail Summit.

WOOF has also been a trending ticker due to the pandemic-fueled pet adoptions and a resultant rise in demand for pet products and services. Approximately $42 billion of pet food was sold in 2020, and this is expected to increase to about $44.1 billion this year.

Before Monday’s stock surge, Petco stock had been heavily shorted at 36%. However, following the recent stock rally, it is speculated that short sellers may be forced to buy back the stock to cut on losses. This would catalyze a further surge in Petco stock prices, similarly to GameStop Corp (NYSE: GME) stock early this year.

WOOF Stock Prospects

Petco recorded a 27% increase in net revenue to $1.4 billion by the end of Q1 2021, surpassing analysts’ expectations of $1.27 billion. The pet retailer also reported $0.17 earnings per share in Q1, contrary to Wall Street’s prediction of $0.09. Additionally, the company cut its losses from $414 million in 2019 to $26 million in 2021.

Currently, the company has a $7.41B market capitalization. It has also gained 9.6% in the past month but has lost 4.6% since its launch. However, its debt of over $2.5 billion has raised concern in addition to the risk for insolvency seeing as the company barely covered accruing interests last year.

Nevertheless, many analysts have maintained a buy rating for the stock and estimated an average price rise to about $29.40, over 10% higher than current levels. They have attributed this to an increase in the company’s credibility and its competitive position despite lingering concerns.

Other financial experts have even suggested a 12-month price target of $40 per share. Furthermore, WOOF stock has a strong potential to outperform market expectations, going by the 9/10 score from TipRanks’ Smart Score rating system.

Nonetheless, contrasting experts maintain that significant volatility is expected in WOOF stock in the future, and at the moment, this implies quite expensive buy options. There has been speculation that a bot programmed to post comments on WOOF stocks misled investors.

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Steve Muchoki

A financial analyst who sees positive income in both directions of the market (bulls & bears). Bitcoin is my crypto safe haven, free from government conspiracies. Mythology is my mystery! "You cannot enslave a mind that knows itself. That values itself. That understands itself."

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