CHWY Should I Buy
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Chewy Inc (CHWY) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. Despite recent price declines and bearish technical indicators, the company's strong financial performance, improving profitability, and attractive valuation make it a compelling long-term investment opportunity.
The stock is showing bearish momentum with MACD negatively expanding (-0.426), RSI at 17.09 indicating oversold conditions, and bearish moving averages (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level (S1: 24.759), with a key resistance at R1: 29.664.
Mizuho installed Chewy as its overall Top Pick for
Strong Q3 financials with revenue up 8.3% YoY, net income up 1405.6% YoY, and EPS up 1300% YoY.
Introduction of veterinary telehealth services and pet pharmaceuticals enhancing competitiveness.
Attractive valuation with a price-to-sales ratio of 0.9, down from 7 in 2021.
Stock has fallen 17% since the CTO's retirement and over 30% since Q2 earnings, raising concerns about leadership stability.
Hedge funds are selling, with a 382.78% increase in selling activity last quarter.
Bearish technical indicators and overall market weakness (S&P 500 down 1.54%).
In Q3 2026, Chewy reported revenue of $3.12 billion (+8.3% YoY), net income of $59.2 million (+1405.6% YoY), EPS of $0.14 (+1300% YoY), and gross margin of 29.78% (+1.53% YoY). These results highlight significant profitability improvements and growth momentum.
Analysts remain positive on Chewy, with Mizuho naming it a Top Pick for 2026 and Wolfe Research maintaining an Outperform rating despite lowering the price target to $44. Other firms like Goldman Sachs and Barclays have raised price targets to $52, citing strong customer growth, margin expansion, and long-term drivers like healthcare and advertising.
