Wag! Group price target lowered to $3 from $5.50 at Craig-Hallum

Craig-Hallum lowered the firm’s price target on Wag! Group to $3 from $5.50 and keeps a Buy rating on the shares after the company announced mixed preliminary Q2 results with revenue missing but record adjusted EBITDA as Wag! has pivoted to prioritize profitability and free cash flow. The company also priced a $10M secondary offering, paying down $8.5M more in debt and expects to refinance its high-cost debt in the next couple of months. While the secondary is dilutive to shareholders, the firm views the steps being taken as a disciplined pivot in strategy that will significantly de-risk the stock, while highlighting the underlying profitability of the business model.