Pet parents are still opening their wallets to buy food, toys and sophisticated veterinary care for Fluffy and Rover. But rising inflation is taking a bite out of those purchases.
“After nearly 20% growth in 2021 and a 9% annual pace through 2025, expansion is expected to slow to about 4% through 2030, though U.S. spending could still hit $242 billion,” wrote Morgan Stanley analysts in a June report on the pet industry.
[Sign up for stock news with our Invested newsletter.]
“Affordability is central to this slowdown,” the report continued. “Persistent inflation has raised pet ownership costs across food, veterinary services, grooming and accessories, prompting consumers, particularly younger owners, to make more careful spending decisions.”
What to Consider When Buying Pet Stocks
Could that signal an opportunity for investors to get into some pet-industry stocks through buying on the dip?
It may, but investors should proceed with caution, says Patrick Ritter, a certified financial planner with Core Planning in the St. Louis area. “Individual stocks in any one industry, like pet care, can offer potential for greater than market-average returns, but there are many examples of companies that never come back from declines, too,” Ritter says. “BlackBerry, Eastman Kodak and Sears Holdings are examples most anyone was once familiar with that are now gone.”
Here are seven companies with a focus on the pet industry, and some pros and cons to keep in mind:
| Pet Stock | Market Capitalization | Beta |
| Trupanion Inc. (ticker: TRUP) | $1.2 billion | 1.4 |
| Chewy Inc. (CHWY) | $9.6 billion | 1.4 |
| Freshpet Inc. (FRPT) | $3.2 billion | 1.6 |
| Tractor Supply Co. (TSCO) | $17.8 billion | 0.5 |
| Zoetis Inc. (ZTS) | $29.7 billion | 0.7 |
| Idexx Laboratories Inc. (IDXX) | $46.1 billion | 1.5 |
| Elanco Animal Health Inc. (ELAN) | $10.9 billion | 1.7 |
Trupanion Inc. (TRUP)
The pet insurance specialist pivoted to profitability in 2025, but shares remain off their 52-week high, and well below their December 2021 high.
Trupanion’s market capitalization is just $1.2 billion, and its beta is 1.43, meaning it moves about 43% more than the market, in the same direction.
Stocks like Trupanion are higher-risk and speculative, Ritter says. For an investor with conviction in this industry or theme, a taxable account may make sense as the holding location. Worst case, losses become harvestable tax assets; best case, gains held over a year qualify for long-term capital gains rates.
“One approach could be to split a smaller percentage allocation to this industry in a speculative pick like TRUP,” he says, adding that it could go alongside a larger allocation to a wide-moat, established dividend-paying stock from the same industry, such as Zoetis Inc. (ZTS).
Chewy Inc. (CHWY)
In plenty of neighborhoods, the cardboard box featuring the blue Chewy logo is a common sight on porches. The online pet products company went public in June 2019, just in time for its post-initial public offering rally to coincide with the pandemic-era broad market rally.
The stock never regained its early 2021 high, and earnings growth has been erratic, although the company has posted a profit for the past three years. In 2024, net income grew 911%, to 91 cents per share, but in 2025 it declined by 43% to 52 cents per share.
For this year, Wall Street is eyeing earnings of 78 cents per share on revenue of $13.5 billion, increases of 50% and 7%, respectively.
In the first-quarter earnings call in early June, the company slashed 2026 sales growth guidance. CEO Sumit Singh attributed the cut to consumers “growing more discerning, driven in part by elevated fuel prices and broader macroeconomic pressures,” and said the updated outlook “reflects a more appropriately conservative view of the consumer environment.”
Freshpet Inc. (FRPT)
The company manufactures and distributes premium pet food through special refrigerators in pet stores, club stores and grocery stores. Most of its products are for dogs, with cat food being a smaller segment.
In addition to more cautious consumer spending, competition from Hill’s Pet Nutrition, a unit of Colgate-Palmolive Co. (CL), General Mills Inc.’s (GIS) Blue Buffalo and The Farmer’s Dog is weighing on Freshpet’s growth outlook.
Revenue continues to rise, but that growth decelerated from 40% in 2022 to 13% in 2025, with analysts forecasting slowdowns this year and next.
However, operational efficiencies may be making up for a weakening consumer outlook.
Shares gapped up 14.6% on Aug. 5, following a better-than-expected second-quarter report that came in ahead of analysts’ views. The consensus price target for the next 12 to 18 months is $75.31, a potential upside of 12.6%.
[Read: 5 Best Photonics Stocks to Buy for 2026]
Tractor Supply Co. (TSCO)
Here again, weak consumer spending is taking a toll. Companion animal supplies accounted for about 24% of the retailer’s revenue in 2025.
In its second-quarter earnings release on July 23, Tractor Supply said, “While the company’s consumable, usable and edible categories remained resilient overall, companion animal continued to perform below the company average, although trends improved through the quarter.”
The company is in the process of closing 75 underperforming locations of its standalone Petsense pet supplies and grooming businesses. It acquired the chain in 2016 and opened more locations, so the slimmed-down business will be close to its size when Tractor Supply bought it.
However, the company is still expanding into the companion animal business. In May 2026, it acquired VIP Petcare. In the news release announcing the acquisition, Tractor Supply said VIP is “the largest provider of mobile veterinary care in the United States, operating community clinics in approximately 2,700 retail locations with national and regional retail partners, including 1,700 Tractor Supply locations, across 39 states and serving more than 1 million pets annually.”
Analysts expect earnings to dip 6% this year, to $1.94 a share, on revenue that grows 3% to about $16 billion.
Zoetis Inc. (ZTS)
A decline in companion-animal revenue was a factor in Zoetis’s reduced guidance for 2026.
When the company reported second-quarter results on Aug. 6, it said its key dermatology franchise for dogs and cats and its Simparica products to treat flea and tick bites and heartworm all showed weakness.
Overall company revenue growth was flat, with earnings up 6% to $1.87 a share. Earnings topped Wall Street views by 2 cents, although revenue of $2.47 billion fell short of expectations for $2.5 billion.
In a prepared statement for the earnings release, Zoetis CEO Kristin Peck said, “Second-quarter results reflected a more pressured companion animal market, as lower clinic visits and pet owner price sensitivity reduced demand across parts of our portfolio and heightened competition in key categories.”
Zoetis, created in a spinoff from Pfizer Inc.’s (PFE) animal health unit in 2013, has a dividend yield of 2.9% on an annual payout of $2.12 per share. The company has a 14-year track record of increasing its dividend.
Idexx Laboratories Inc. (IDXX)
On Aug. 4, when it reported its second-quarter results, pet healthcare specialist Idexx raised its full-year 2026 outlook. It now sees revenue growing by about 9% to $4.7 billion and earnings per share increasing by about 12% to $14.94.
The company cited strong diagnostics demand from vet clinics.
Idexx’s valuation is a bit rich, but it might not worry growth investors, as shares trade at a multiple of about 39 times trailing earnings. That’s well above the medical-equipment industry average, although it’s below the company’s own five-year average price-to-earnings ratio.
However, for more conservative investors, Idexx may not be an ideal choice. The company does not pay a dividend, so returns are dependent on price and earnings growth.
There’s no dividend to offer a cushion if growth slows, but the company does return cash to shareholders in the form of an ongoing share repurchase program. There’s risk here, too, however. In the company’s own words from a 2024 news release, “The share repurchase program has no specified expiration date and may be suspended or discontinued at any time.”
Elanco Animal Health Inc. (ELAN)
The animal-health pharmaceutical company reported second-quarter results on Aug. 5 after the market close. Shares tumbled 7.7% in the following session, and dropped another 8.6% in the next.
Profit-taking may be the culprit behind the selling. Elanco shares are up 34% on a one-year basis, and have been climbing out of a correction since mid-May. There was no bad news fundamentally, as the company posted double-digit revenue growth, beat earnings views and boosted its full-year guidance for revenue and earnings.
In other words, the pullback may be due to investors locking in gains, rather than worries about the company’s forecasts.
In the bigger picture, the stock has languished since its spinoff from Eli Lilly & Co. (LLY) in 2018, never regaining its post-IPO highs.
However, the company is recovering from a debt burden due to its 2020 acquisition of Bayer Animal Health, says Vince Stanzione, CEO and founder of stock market analysis firm First Information.
Upcoming product launches and regulatory approvals for a Lyme disease treatment and a vaccine for leptospirosis, a bacterial infection that dogs can get from exposure to contaminated water, soil or urine from infected wildlife, should help upcoming results, he adds.
“Since last year’s lows of around $8, the stock is up over 200%, and I’m expecting better earnings in the coming quarters to help bring new investors in,” he says.
At its current price of about $22, it has a “potential upside of 50% plus in the next 12 months in what is a fairly resilient business with recurring revenues, especially in the pet business,” Stanzione adds.
More from U.S. News
7 of the Best 5-Star ETFs to Buy
7 Best Defense Stocks to Buy Now
7 Best Data Center Stocks, ETFs and REITs
7 Best Pet Stocks to Buy in 2026 originally appeared on usnews.com
Update 08/10/26: This story was previously published at an earlier date and has been updated with new information.
