Petco Health and Wellness Company, Inc. is upgraded to a 'strong buy' due to compelling valuation and improving fundamentals. Despite a Q1 EPS miss driven by a one-time debt extinguishment loss, WOOF delivered revenue above expectations and year-over-year cash flow growth. Management guides for flat to modest revenue growth and higher EBITDA in 2026, even with net store closures, indicating underlying comparable sales strength.