Chewy, Inc. Stock Analysis and Outlook
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 19 2026
0mins
Should l Buy CHWY?
Source: Yahoo Finance
- Stock Performance: On February 13, Chewy, Inc. (NYSE:CHWY) stock fell to $24.06, slightly above its 52-week low of $24.02, indicating market concerns about its short-term performance, despite analysts' optimism for its future.
- Analyst Ratings: Despite the stock's decline, 72% of analysts remain bullish on Chewy, with Piper Sandler reaffirming an Overweight rating and a price target of $48, reflecting confidence in the company's long-term growth potential.
- Earnings Expectations: Piper Sandler highlights that Chewy's earnings for 2025 are nearing consensus estimates, but with only a 3% EBITDA beat year-to-date compared to an average of 22% in 2024, indicating a slowdown in earnings growth.
- Sales Growth Forecast: While the market expects Chewy's sales growth to be around 8%, Piper Sandler projects a growth rate of 7-8%, showcasing the challenges the company faces in the competitive pet food market.
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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: 26.150
Low
42.00
Averages
47.06
High
52.00
Current: 26.150
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.
Analysis of Chewy's Undervalued Stock Reasons
- Market Misunderstanding: Many investors perceive Chewy as a low-margin, highly competitive online pet retailer, overlooking its established habit-based consumer platform, which demonstrates greater resilience amid economic uncertainty.
- Stability of Consumer Spending: Despite rising fuel costs and economic pressures, Chewy's products, such as dog food and cat litter, remain stable necessities, highlighting the difference between pet care and other discretionary consumer goods.
- Financial Performance: Chewy is expected to grow revenues by over 8%, significantly higher than the S&P 500's average growth rate, yet it trades at a forward P/E of 16.5x, indicating a roughly 25% market discount, suggesting its stock is undervalued.
- Technical Challenges: Despite strong fundamentals, Chewy's stock has fallen 23% year-to-date and is down over 78.5% from its all-time high, leading investors to adopt a wait-and-see approach ahead of its upcoming earnings report, contributing to a bearish market sentiment.
See More
Chewy's Profit Growth and Market Opportunities
- Profitability Improvement: Chewy has successfully achieved profitability over the past five years, driven by its wide range of products and services, including food, toys, and prescription medications, showcasing its strong competitive position in the pet retail market.
- High Customer Loyalty: Chewy's Autoship service accounts for over 80% of its net sales, indicating a high repeat purchase rate among customers, which provides visibility for future sales and enhances investor confidence.
- New Revenue Streams: Chewy has opened veterinary clinics in the U.S. and expanded its e-commerce platform to Canadian customers, which not only generates additional revenue but also introduces new customers to its e-commerce site, further driving business growth.
- Attractive Valuation: With a current price-to-earnings ratio of 16 times, close to its lowest level in the past three years, combined with its solid growth track record, Chewy's stock appears attractive in the current market environment, potentially offering long-term returns for investors.
See More
Chewy's Customer Loyalty Drives Revenue Growth
- Customer Loyalty Boost: Chewy has successfully built a loyal customer base, particularly through its Autoship service, which accounts for over 80% of net sales, indicating strong customer retention and providing visibility for future sales.
- Profitability Growth: Over the past five years, Chewy has consistently improved its profitability, and despite a 36% decline in stock price over the last three years, this does not reflect the true performance of its business, suggesting market undervaluation of its potential.
- Market Expansion Strategy: Chewy has opened veterinary clinics in the U.S. and launched an e-commerce platform for Canadian customers, which not only provides new revenue streams but also helps attract new customers, further driving business growth.
- Valuation Opportunity: Chewy is currently trading at 16 times forward earnings estimates, close to its lowest level in the past three years, and combined with its stable growth trajectory, this indicates a high-quality stock worth investing in, with potential for significant returns in the future.
See More
Three Retail Stocks to Buy This Month
- Amazon's Growth Potential: Amazon (AMZN), as the world's largest e-commerce operator with a market cap of $2.3 trillion, showcases significant operating leverage with a 24% increase in North American operating income in Q4, driven by advancements in logistics and AI.
- MercadoLibre's Market Edge: MercadoLibre (MELI) has consistently grown revenue by over 30% each quarter for seven years, including a 45% increase last quarter, leveraging free shipping and AI to enhance ad revenue and solidify its position in the Latin American e-commerce market.
- Chewy's Defensive Business Model: Chewy (CHWY) benefits from a loyal customer base, with over 80% of sales from autoship customers, leading to an 8.4% revenue growth in the first nine months of the fiscal year, while expanding its high-margin advertising business.
- Investment Opportunity Assessment: Despite Chewy's forward P/E ratio of 16.5 indicating low market recognition of its growth potential, its expansion into pet food and medicine, along with a new membership program, suggests significant long-term investment value.
See More
Growth Potential of Amazon, MercadoLibre, and Chewy
- Amazon's Operating Leverage: Amazon's e-commerce business has achieved operational leverage through AI and robotics, with North American operating income rising 24% on a 10% sales increase in Q4, demonstrating enhanced efficiency and profitability of its logistics network.
- Strong AWS Growth: Amazon Web Services (AWS) experienced a 24% revenue growth last quarter, and as capital expenditures ramp up for 2026, its data center capacity is expected to expand further, driving sustained growth in the future.
- MercadoLibre's Hidden Growth: MercadoLibre has grown its revenue by over 30% each quarter for the past seven years, with a remarkable 45% growth last quarter, leveraging its logistics advantage in Latin America and AI-driven ad revenue growth to attract more consumers.
- Chewy's Defensive Growth: Chewy derives over 80% of its sales from auto-ship pet food, and despite a P/E ratio of 16.5, its strong 8.4% sales growth and high-margin ad business position it as a valuable long-term investment in the market.
See More
Analysis of Chewy's Stock Price Recovery Prospects
- Significant Sales Growth: Chewy generated over $9.3 billion in sales during the first nine months of fiscal 2025, marking an 8% year-over-year increase, bolstered by new business lines such as pet pharmaceuticals and telehealth services, which enhance its profitability and market adaptability.
- Substantial Operating Income Increase: By keeping cost and expense growth in check, Chewy achieved a 74% year-over-year increase in operating income, indicating significant progress in efficiency and profitability that may attract investor interest.
- Net Income Decline Risk: Although an income tax benefit in 2024 inflated net income, the comprehensive income for fiscal 2025 fell to $184 million, down from the previous year, with net margin dropping from 4.3% to 2%, reflecting economic pressures on the company's profitability.
- Valuation Appeal: With a forward P/E ratio of 17, significantly lower than the current 55, Chewy may attract renewed investor interest, although the low-margin nature of retail limits its potential for sustained profit growth over time.
See More
Analysis of Chewy's Undervalued Stock Reasons
- Market Misunderstanding: Many investors perceive Chewy as a low-margin, highly competitive online pet retailer, overlooking its established habit-based consumer platform, which demonstrates greater resilience amid economic uncertainty.
- Stability of Consumer Spending: Despite rising fuel costs and economic pressures, Chewy's products, such as dog food and cat litter, remain stable necessities, highlighting the difference between pet care and other discretionary consumer goods.
- Financial Performance: Chewy is expected to grow revenues by over 8%, significantly higher than the S&P 500's average growth rate, yet it trades at a forward P/E of 16.5x, indicating a roughly 25% market discount, suggesting its stock is undervalued.
- Technical Challenges: Despite strong fundamentals, Chewy's stock has fallen 23% year-to-date and is down over 78.5% from its all-time high, leading investors to adopt a wait-and-see approach ahead of its upcoming earnings report, contributing to a bearish market sentiment.
See More
Chewy's Profit Growth and Market Opportunities
- Profitability Improvement: Chewy has successfully achieved profitability over the past five years, driven by its wide range of products and services, including food, toys, and prescription medications, showcasing its strong competitive position in the pet retail market.
- High Customer Loyalty: Chewy's Autoship service accounts for over 80% of its net sales, indicating a high repeat purchase rate among customers, which provides visibility for future sales and enhances investor confidence.
- New Revenue Streams: Chewy has opened veterinary clinics in the U.S. and expanded its e-commerce platform to Canadian customers, which not only generates additional revenue but also introduces new customers to its e-commerce site, further driving business growth.
- Attractive Valuation: With a current price-to-earnings ratio of 16 times, close to its lowest level in the past three years, combined with its solid growth track record, Chewy's stock appears attractive in the current market environment, potentially offering long-term returns for investors.
See More
Chewy's Customer Loyalty Drives Revenue Growth
- Customer Loyalty Boost: Chewy has successfully built a loyal customer base, particularly through its Autoship service, which accounts for over 80% of net sales, indicating strong customer retention and providing visibility for future sales.
- Profitability Growth: Over the past five years, Chewy has consistently improved its profitability, and despite a 36% decline in stock price over the last three years, this does not reflect the true performance of its business, suggesting market undervaluation of its potential.
- Market Expansion Strategy: Chewy has opened veterinary clinics in the U.S. and launched an e-commerce platform for Canadian customers, which not only provides new revenue streams but also helps attract new customers, further driving business growth.
- Valuation Opportunity: Chewy is currently trading at 16 times forward earnings estimates, close to its lowest level in the past three years, and combined with its stable growth trajectory, this indicates a high-quality stock worth investing in, with potential for significant returns in the future.
See More
Three Retail Stocks to Buy This Month
- Amazon's Growth Potential: Amazon (AMZN), as the world's largest e-commerce operator with a market cap of $2.3 trillion, showcases significant operating leverage with a 24% increase in North American operating income in Q4, driven by advancements in logistics and AI.
- MercadoLibre's Market Edge: MercadoLibre (MELI) has consistently grown revenue by over 30% each quarter for seven years, including a 45% increase last quarter, leveraging free shipping and AI to enhance ad revenue and solidify its position in the Latin American e-commerce market.
- Chewy's Defensive Business Model: Chewy (CHWY) benefits from a loyal customer base, with over 80% of sales from autoship customers, leading to an 8.4% revenue growth in the first nine months of the fiscal year, while expanding its high-margin advertising business.
- Investment Opportunity Assessment: Despite Chewy's forward P/E ratio of 16.5 indicating low market recognition of its growth potential, its expansion into pet food and medicine, along with a new membership program, suggests significant long-term investment value.
See More
Growth Potential of Amazon, MercadoLibre, and Chewy
- Amazon's Operating Leverage: Amazon's e-commerce business has achieved operational leverage through AI and robotics, with North American operating income rising 24% on a 10% sales increase in Q4, demonstrating enhanced efficiency and profitability of its logistics network.
- Strong AWS Growth: Amazon Web Services (AWS) experienced a 24% revenue growth last quarter, and as capital expenditures ramp up for 2026, its data center capacity is expected to expand further, driving sustained growth in the future.
- MercadoLibre's Hidden Growth: MercadoLibre has grown its revenue by over 30% each quarter for the past seven years, with a remarkable 45% growth last quarter, leveraging its logistics advantage in Latin America and AI-driven ad revenue growth to attract more consumers.
- Chewy's Defensive Growth: Chewy derives over 80% of its sales from auto-ship pet food, and despite a P/E ratio of 16.5, its strong 8.4% sales growth and high-margin ad business position it as a valuable long-term investment in the market.
See More
Analysis of Chewy's Stock Price Recovery Prospects
- Significant Sales Growth: Chewy generated over $9.3 billion in sales during the first nine months of fiscal 2025, marking an 8% year-over-year increase, bolstered by new business lines such as pet pharmaceuticals and telehealth services, which enhance its profitability and market adaptability.
- Substantial Operating Income Increase: By keeping cost and expense growth in check, Chewy achieved a 74% year-over-year increase in operating income, indicating significant progress in efficiency and profitability that may attract investor interest.
- Net Income Decline Risk: Although an income tax benefit in 2024 inflated net income, the comprehensive income for fiscal 2025 fell to $184 million, down from the previous year, with net margin dropping from 4.3% to 2%, reflecting economic pressures on the company's profitability.
- Valuation Appeal: With a forward P/E ratio of 17, significantly lower than the current 55, Chewy may attract renewed investor interest, although the low-margin nature of retail limits its potential for sustained profit growth over time.
See More
