Finding growth stocks after they’ve already doubled or tripled might not offer the best risk-reward opportunity for investors. Instead, finding them after a major pullback can give you far more attractive opportunities. When a company’s long-term outlook remains intact but its share price moves sharply lower due to temporary challenges, Foolish investors get a chance to buy a quality business at a discount.
One Canadian growth stock that appears to fit that description right now is Pet Valu Holdings (TSX:PET). The company operates in a consumer market that has historically remained resilient through economic cycles, while continuing to benefit from strong customer loyalty and recurring demand. Although Pet Valu stock has struggled over the last year, its underlying business continues expanding through store growth, premium product offerings, and digital investments.
In this article, I’ll explain why this growth stock could be worth buying aggressively after its recent decline.
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Why Pet Valu stock stands out
If you don’t know it already, Pet Valu is a specialty retailer of pet food, pet supplies, and pet-related products. This Markham-based firm runs more than 850 corporate-owned and franchised stores across the country under banners including Pet Valu, Bosley’s by Pet Valu, Total Pet, and Tisol Pet Nutrition & Supply.
Its product lineup includes items like premium pet food and treats, accessories, health products, and aquariums.
At the time of writing, Pet Valu stock traded at $18.69 per share with a market cap of roughly $1.3 billion. Although the stock has recovered by nearly 8% over the last 10 sessions, it’s still down nearly 52% from its 52-week high, making it look undervalued to buy right now based on its long-term growth prospects.
Revenue growth continues despite temporary margin pressures
Pet Valu’s stock may be under pressure, but its latest numbers show the business is still growing. In the first quarter of 2026, the company’s revenue rose 3.2% year-over-year (YoY) to $287.9 million, while its system-wide sales climbed 2.5% to $375.2 million. That’s not explosive growth, but it does show that demand for pet products remains stable even in a tougher consumer environment.
However, Pet Valu’s adjusted net profit dropped by 14.8% YoY to $21.6 million last quarter. Still, this doesn’t look like a broken business. The company opened eight new stores and ended the quarter with 870 stores across its network.
The pet products retailer also generated $13.1 million in free cash flow and declared a quarterly dividend of $0.13 per share, giving investors some income from its 2.8% dividend yield while they wait for a recovery.
What could drive recovery?
One of Pet Valu’s biggest growth drivers remains its store network. The company now expects to open about 40 new stores in 2026, which should support its revenue growth even if its same-store sales remain modest in the near term.
The company’s updated 2026 outlook calls for revenue growth of 2% to 4% on a comparable 52-week basis. It also expects an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) margin of about 21%, showing that its management still sees room to protect profitability despite value-seeking consumer behaviour and higher fuel costs.
Moreover, Pet Valu is also reinvesting in the business. It plans around $35 million of business reinvestment this year, including net capital expenditures and transformation costs. These investments mainly focus on improving areas such as technology, e-commerce, omni-channel capabilities, and supply chain efficiency.
Foolish bottom line
Pet Valu’s latest quarter wasn’t perfect, but it also wasn’t alarming enough to ignore the stock’s long-term potential. Its revenue is still growing, the store base continues expanding, and the company expects more new locations in 2026.
For investors willing to look beyond near-term margin pressure, the recent pullback in PET stock could be a chance to buy a top Canadian growth stock at an attractive price. If Pet Valu can keep gaining market share, improve efficiency, and benefit from continued demand for pet essentials, the stock could reward patient shareholders handsomely in the years to come.
