Goldman Sachs Remains Bullish on Petco (WOOF) With $3.95 Price Target

Petco Health & Wellness (NASDAQ:WOOF) has surged nearly 48% over the past week and 37% over the past month, with shares now trading around $3.44 as of March 13. Year-to-date the stock is up more than 20%, though it remains well below its 52-week high of $4.50.

Most Wall Street analysts carry a consensus price target of just $3.42, with 8 of 12 analysts rating the stock a Hold. But Goldman Sachs is taking a more assertive stance. The firm maintained a Buy rating and issued a $3.95 price target (lowered from $4.53), representing meaningful upside from the March 11 filing price of $2.53. But can WOOF realistically reach $3.95 by the end of 2026?

Goldman Sachs’s $3.95 WOOF Prediction

Goldman’s conviction rests on Petco’s Q4 adjusted EBITDA of $106.29M, which came in above both company guidance and consensus estimates. Adjusted EBITDA margin expanded to 7.0% from 6.2% a year ago, signaling that management’s cost restructuring is translating into durable profitability gains rather than one-time improvements. The firm views this as evidence that the operational reset under CEO Joel Anderson is on track.

Key Drivers of WOOF Stock Performance

1. EBITDA beat and margin expansion: Q4 adjusted EBITDA rose 10.6% year-over-year with margin improvement of 80 basis points to 7.0%. Q4 adjusted EBITDA rose 10.6% year-over-year with margin improvement of 80 basis points to 7.0%.
2. Better-than-guided profitability: Full-year FY2026 adjusted EBITDA guidance of $415M-$430M reflects management’s confidence in sustaining gains. Free cash flow nearly doubled year-over-year to $186.953M for the full year, providing a buffer to service debt and reinvest without diluting shareholders.
3. Improving operational execution: The leverage ratio improved sharply from 4.2x to 3.0x, reducing financial risk. Cash on the balance sheet grew 54.89% year-over-year to $256.736M, giving Petco flexibility that was absent just a year ago.

What Will It Take for WOOF to Reach $3.95?

At 243.453 million shares outstanding, a $3.95 price target represents meaningful upside from the current price. Getting there requires three things: a return to positive comparable sales as guided, continued EBITDA margin expansion toward the $415M-$430M target range, and stabilization in the broader consumer environment. University of Michigan consumer sentiment sits at a pessimistic 56.4, so Petco’s comp recovery thesis depends on sentiment improvement that is not yet confirmed.

The primary risk is tariff uncertainty, which management explicitly flagged as an assumption embedded in guidance. Still, with free cash flow accelerating, leverage declining, and EBITDA beating expectations, Goldman’s $3.95 target reflects a credible path if operational improvements continue.