Chewy CEO Highlights Stable Pricing, Growing E-Commerce Trends, and AI Initiatives as Pet Care Sector Remains Steady Through 2026
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 25 2026
0mins
Source: stocktwits
Fourth Quarter Performance: Chewy reported a fourth-quarter revenue of $3.26 billion and adjusted earnings per share of $0.28, aligning with analysts' expectations.
Market Outlook: CEO Sumit Singh indicated that while demand remains strong, the pet care industry is not expected to see short-term cyclical boosts, projecting stability rather than significant growth through 2026.
Transition to E-Commerce: The company is focusing on the ongoing transition towards online shopping, emphasizing customer preferences for convenience and subscription-based models.
Stock Performance and Sentiment: Chewy's stock rose over 13% following the earnings report, reflecting a shift in retail sentiment to "extremely bullish," with increased message volume indicating positive market reactions.
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Analyst Views on CHWY
Wall Street analysts forecast CHWY stock price to rise
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 19.930
Low
42.00
Averages
47.06
High
52.00
Current: 19.930
Low
42.00
Averages
47.06
High
52.00
About CHWY
Chewy, Inc. is an e-commerce business geared toward pet products and services. The Company’s products consist of pet food and treats, pet supplies and pet medications, other pet-health products, and pet services. It serves its customers through its retail websites, and its mobile applications and focuses on delivering customer service, competitive prices, convenience, including Chewy’s Autoship subscription program, and a range of pet food, treats and supplies, and pet healthcare products and services. It partners with approximately 3,200 of the brands in the pet industry, and it creates and offers its own private brands. It owns a number of trademark registrations and applications in the United States and in foreign jurisdictions. These trademarks include American Journey, Blue Box Event, Careplus, Chewy, Chewy.com, Chewy Vet Care, Dr. Lyon’s, Frisco, Goody Box, Onguard, PetMD, PracticeHub, Tiny Tiger, True Acre Farms, Tylee’s, Vibeful, and The Zoo.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Profitability Improvement: The adjusted EBITDA margin increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for another 100 basis points of margin expansion this year and a long-term target of at least 10%, reflecting the company's efforts to enhance operational efficiency and profitability.
- Market Competition Pressure: While Chewy continues to see growth in active customers and free cash flow, it faces pricing pressures from competitors like Amazon and Walmart, which could further squeeze margins in a price-sensitive consumer market.
- Financial Flexibility: Chewy has approximately $880 million in net cash and no debt, providing financial support for investments in growth areas like vet clinics, with free cash flow increasing by 24% to $562 million last year, demonstrating strong cash generation capabilities.
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- Improving Profitability: Chewy's adjusted EBITDA margin has increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for an additional 100 basis points of margin expansion this year, indicating a strong focus on enhancing profitability.
- Intensifying Market Competition: Chewy faces significant price pressure from competitors like Amazon and Walmart, and a potential price war could further squeeze its margins, presenting a risk that investors need to monitor closely.
- Strong Financial Flexibility: With approximately $880 million in net cash and no debt, Chewy is well-positioned to invest in growth initiatives such as expanding its vet clinics, and its free cash flow grew by 24% to $562 million last year, reflecting a solid financial foundation.
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Chewy Stock Down 40% Despite 24% Growth in Free Cash Flow
- Stable Customer Growth: Chewy continues to report steady growth in active customers, with the stock down over 40% year-to-date; however, spending per customer and free cash flow remain stable, demonstrating resilience under its subscription model.
- Subscription Model Advantage: In fiscal 2025, Autoship customer sales accounted for 83% of total revenue, up from 76% two years prior, indicating that this model provides a predictable, recurring revenue stream, with subscriber sales growing 12% last year, outpacing the company's total revenue growth of 6%.
- Improving Profitability: Chewy's adjusted EBITDA margin has improved from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for another 100 basis points of margin expansion this year and a long-term target of at least 10%, supported by operating leverage and the expansion of higher-margin private brands.
- Financial Flexibility: With approximately $880 million in net cash and no debt, Chewy can invest in growth initiatives like its vet clinics, and last year, free cash flow grew by 24% to $562 million, with the current valuation at just 12 times this year's earnings estimates, highlighting its attractiveness given the recurring revenue and potential for margin expansion.
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Chewy Stock Price Forecast for Next Five Years
- Sales Growth Trend: Chewy's fiscal 2022 sales reached $10.1 billion, up over 41% from $7.1 billion in 2020, but recent growth has slowed to 8.3%, indicating that pandemic-driven growth may not be sustainable and future growth should be cautiously assessed.
- Customer Base Expansion: Chewy's autoship customers now account for 83.3% of 2025 sales, up from 79.2%, while active customers grew by 4% to 21.3 million, demonstrating effective strategies in customer retention and sales driving.
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- Customer Base Expansion: As of 2023, Chewy's active customer count grew to 21.3 million, a 4% increase year-over-year, with autoship customers accounting for 83.3% of 2025 sales, indicating effective strategies in customer retention and sales growth.
- Future Sales Forecast: Chewy is projected to reach $12.6 billion in sales by 2026, with an 8% annual growth rate suggesting a per-share sales figure of $43.48 in five years, highlighting the company's attractiveness for long-term investors.
- Valuation Analysis: With a current P/S ratio of 0.7, below the five-year average of 1.3, shares could potentially double to $43.48 if a 1x P/S multiple is applied, although a slowdown to 4% growth could limit the stock price to $25.20, necessitating careful risk assessment by investors.
See More
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- Portfolio Recommendations: Goldman analysts suggest a portfolio of Russell 1000 stocks with low sensitivity to both AI trades and economic growth pricing, which have recently seen positive earnings revisions by analysts, indicating fundamental support for these investments.
- Eli Lilly Outlook: Although Eli Lilly's stock has slipped about 1% this year, Goldman believes only 9% of its recent returns are driven by the U.S. economic outlook and AI, while Morgan Stanley's analyst sets a $1,344 price target, implying a 26.2% upside potential.
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See More
Chewy Transitions to Integrated Healthcare Provider
- Subscription Service Growth: Chewy's Autoship subscription service accounted for 83% of total revenue in fiscal 2025, up from 76% two years prior, indicating strong demand for pet food and medications despite overall revenue growth of only 6%.
- Profitability Improvement: The adjusted EBITDA margin increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for another 100 basis points of margin expansion this year and a long-term target of at least 10%, reflecting the company's efforts to enhance operational efficiency and profitability.
- Market Competition Pressure: While Chewy continues to see growth in active customers and free cash flow, it faces pricing pressures from competitors like Amazon and Walmart, which could further squeeze margins in a price-sensitive consumer market.
- Financial Flexibility: Chewy has approximately $880 million in net cash and no debt, providing financial support for investments in growth areas like vet clinics, with free cash flow increasing by 24% to $562 million last year, demonstrating strong cash generation capabilities.
See More
Chewy Faces Market Pressure Amid Growth Opportunities
- Stable Customer Growth: Despite Chewy's stock price plummeting over 40% year-to-date, the company continues to see growth in active customers and spending per customer, with Autoship sales accounting for 83% of total revenue in fiscal 2025, highlighting the stability and core importance of its subscription model.
- Improving Profitability: Chewy's adjusted EBITDA margin has increased from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for an additional 100 basis points of margin expansion this year, indicating a strong focus on enhancing profitability.
- Intensifying Market Competition: Chewy faces significant price pressure from competitors like Amazon and Walmart, and a potential price war could further squeeze its margins, presenting a risk that investors need to monitor closely.
- Strong Financial Flexibility: With approximately $880 million in net cash and no debt, Chewy is well-positioned to invest in growth initiatives such as expanding its vet clinics, and its free cash flow grew by 24% to $562 million last year, reflecting a solid financial foundation.
See More
Chewy Stock Down 40% Despite 24% Growth in Free Cash Flow
- Stable Customer Growth: Chewy continues to report steady growth in active customers, with the stock down over 40% year-to-date; however, spending per customer and free cash flow remain stable, demonstrating resilience under its subscription model.
- Subscription Model Advantage: In fiscal 2025, Autoship customer sales accounted for 83% of total revenue, up from 76% two years prior, indicating that this model provides a predictable, recurring revenue stream, with subscriber sales growing 12% last year, outpacing the company's total revenue growth of 6%.
- Improving Profitability: Chewy's adjusted EBITDA margin has improved from 3.3% in fiscal 2023 to 5.7% in 2025, with management guiding for another 100 basis points of margin expansion this year and a long-term target of at least 10%, supported by operating leverage and the expansion of higher-margin private brands.
- Financial Flexibility: With approximately $880 million in net cash and no debt, Chewy can invest in growth initiatives like its vet clinics, and last year, free cash flow grew by 24% to $562 million, with the current valuation at just 12 times this year's earnings estimates, highlighting its attractiveness given the recurring revenue and potential for margin expansion.
See More
Chewy Stock Price Forecast for Next Five Years
- Sales Growth Trend: Chewy's fiscal 2022 sales reached $10.1 billion, up over 41% from $7.1 billion in 2020, but recent growth has slowed to 8.3%, indicating that pandemic-driven growth may not be sustainable and future growth should be cautiously assessed.
- Customer Base Expansion: Chewy's autoship customers now account for 83.3% of 2025 sales, up from 79.2%, while active customers grew by 4% to 21.3 million, demonstrating effective strategies in customer retention and sales driving.
- Future Valuation Analysis: With a current P/S ratio of 0.7, below the five-year median of 1.3, shares could potentially reach $43.48 if a 1x P/S multiple is applied, nearly doubling the current price and indicating an attractive long-term investment opportunity.
- Growth Risk Assessment: Should Chewy's sales only grow by 4% and the P/S ratio remain at 0.7, the stock price would only reach $25.20, representing a mere 17% gain over five years, highlighting the need for investors to be aware of potential growth slowdown risks.
See More
Analysis of Chewy's Future Stock Growth Potential
- Sales Growth Review: Chewy's fiscal 2022 sales reached $10.1 billion, up over 41% from $7.1 billion in 2020, reflecting strong market performance amid a surge in demand for pet products during the early pandemic.
- Customer Base Expansion: As of 2023, Chewy's active customer count grew to 21.3 million, a 4% increase year-over-year, with autoship customers accounting for 83.3% of 2025 sales, indicating effective strategies in customer retention and sales growth.
- Future Sales Forecast: Chewy is projected to reach $12.6 billion in sales by 2026, with an 8% annual growth rate suggesting a per-share sales figure of $43.48 in five years, highlighting the company's attractiveness for long-term investors.
- Valuation Analysis: With a current P/S ratio of 0.7, below the five-year average of 1.3, shares could potentially double to $43.48 if a 1x P/S multiple is applied, although a slowdown to 4% growth could limit the stock price to $25.20, necessitating careful risk assessment by investors.
See More
