Chewy, MercadoLibre, and PayPal: Three Undervalued Growth Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 20 2026
0mins
Should l Buy CHWY?
Source: Fool
- Chewy's Steady Growth: Chewy is projected to reach $12.6 billion in revenue for 2024, a 6% increase from 2023, with 84% of sales coming from autoship customers, indicating resilience in its business model and customer loyalty.
- MercadoLibre's Market Leadership: MercadoLibre reported third-quarter revenue of $7.4 billion, a 39% year-over-year increase, solidifying its position as a leading player in Latin America's e-commerce market, benefiting from the rise of high-speed internet and smartphone adoption.
- PayPal's Ongoing Appeal: Despite a more than 80% drop in stock price since its pandemic peak in 2021, PayPal's third-quarter revenue grew by 7%, maintaining nearly half of the online payment market share, showcasing its strong market position.
- PayPal's Confidence Return: PayPal recently initiated dividend payments, albeit modest at 10% of net profits, reflecting the company's confidence in future growth, which may attract more investor interest.
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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: 26.620
Low
42.00
Averages
47.06
High
52.00
Current: 26.620
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.
Chewy's Continued Growth: Autoship as the Sales Engine
- Customer Loyalty Growth: Chewy's customer-centric operations have successfully attracted a loyal consumer base, benefiting from a 9% annual growth in the U.S. pet industry since 2018, showcasing significant market potential.
- Autoship Program Success: Chewy's Autoship subscription program is projected to account for 83% of sales by 2025, becoming the company's 'sales engine,' with profitability increasing through its distribution network, driving gross margins from 20% in 2019 to 29% today.
- EBITDA Margin Improvement: Chewy's EBITDA margin has surged from -7% in 2019 to 3%, with management forecasting it to reach 10% in the future, indicating a substantial enhancement in profitability and increasing investment appeal.
- New High-Margin Growth Areas: Chewy is expanding into high-margin growth areas such as Chewy Vet Care clinics and advertising, which are expected to generate higher revenues and profits, further solidifying its market position.
See More
Three Stocks to Buy and Hold for the Next Decade
- Carvana Growth Potential: Carvana sold nearly 600,000 vehicles in 2024, a 43% increase, and despite its small market share, it is expected to benefit from the growing trend of online car purchases, driving revenue growth and record profits in the coming years.
- Chewy's Market Strategy: Chewy's quarterly revenue reached $3.26 billion, with 84% coming from 'autoship' customers, showcasing its competitive edge in the pet supply e-commerce sector, and it is likely to continue attracting consumers seeking convenience.
- SoFi Customer Growth: As of last year, SoFi Technologies served 13.7 million unique customers, a 35% year-over-year increase, and in the increasingly digital banking landscape in the U.S., SoFi meets consumer demand for convenience, positioning itself for strong growth ahead.
- Online Shopping Trend: With more consumers shifting to online shopping, companies like Carvana, Chewy, and SoFi are at the forefront of industry transformation, poised for sustained business expansion and market share growth over the next decade.
See More
Chewy Stock Poised for Rebound Amid Growth Prospects
- Profitability Improvement: Chewy achieved profitability in 2022, and despite a 78% drop in stock price, its autoship program accounts for 83% of net sales, demonstrating strong customer retention in a competitive market.
- New Business Expansion: Chewy has introduced a pet pharmacy, telehealth services, and the Chewy+ subscription service; although currently operating only 18 clinics in five states, these new ventures present significant growth potential for future sales.
- Valuation Changes: With a P/E ratio of 50, Chewy's valuation appears high, yet it compares favorably to Amazon during its e-commerce growth phase, and its P/S ratio has dropped to 0.9, indicating a reassessment of its value proposition by the market.
- Future Growth Expectations: Analysts forecast a 26% profit growth for Chewy this year and 24% by 2027, and as investors recognize its low valuation and ongoing growth, more capital is likely to flow into the stock, supporting its rebound.
See More
Chewy's Stock Shows Signs of Potential Rebound
- Sustained Sales Growth: Despite Chewy's stock price dropping approximately 78% since its peak in 2021, the company continues to see net sales growth, demonstrating its strong sales capabilities in a competitive market, particularly as consumers return to offline shopping post-pandemic.
- Improved Profitability: Chewy achieved profitability in 2022, and although its price-to-earnings (P/E) ratio stands at 50, it remains comparable to Amazon's performance during its e-commerce growth phase, indicating significant improvements in the company's profitability and market competitiveness.
- Expansion of New Services: Chewy has introduced new lines of business, including a pet pharmacy, telehealth services, and the Chewy+ subscription service, which enhances customer loyalty; currently, the autoship service accounts for 83% of its net sales, laying a solid foundation for future growth.
- Positive Future Projections: Analysts forecast a 26% profit growth for Chewy this year and 24% by 2027, and as investors become more aware of its low valuation and ongoing growth, Chewy's stock is likely to attract more buying interest, potentially driving a rebound in its stock price.
See More
Chewy Reports Strong Earnings Amid Stock Decline, Potential Buy Opportunity
- Strong Financial Performance: Chewy's Q4 and fiscal 2025 results showed net sales rising over 6% to $12.6 billion, with operating income more than doubling from $112.6 million in 2024 to $254.3 million, demonstrating resilience amid challenges.
- Positive Growth Outlook: For fiscal 2026, Chewy projects revenue growth of around 8%, forecasting total revenue between $13.6 billion and $13.75 billion, slightly exceeding analyst expectations, indicating robust customer engagement.
- Attractive Stock Valuation: Despite a 21% decline in stock price at the start of 2026, Chewy's forward P/E ratio stands at just 17, significantly lower than the S&P 500's average of over 20, suggesting the stock is undervalued and appealing for long-term investors.
- Market Competitiveness: Chewy's business remains resilient without relying on price increases, positioning it as a strong candidate for long-term investment, particularly as the pet industry continues to grow steadily.
See More
Chewy Reports 6% Revenue Growth, Outlook Positive
- Revenue Growth: Chewy's net sales increased by 6% in fiscal 2025, totaling $12.6 billion, demonstrating the resilience of its business model and potentially attracting long-term investors.
- Operating Income Doubling: The company's operating income more than doubled from $112.6 million in 2024 to $254.3 million in 2025, indicating a significant improvement in profitability and boosting market confidence.
- Positive Outlook: Chewy projects an 8% revenue growth for fiscal 2026, with expected total revenue between $13.6 billion and $13.75 billion, surpassing analyst expectations and reflecting an increase in active customers.
- Attractive Valuation: Chewy's forward price-to-earnings ratio stands at just 17, lower than the S&P 500's 20, suggesting that its stock is relatively cheap and presents an opportunity for long-term investors amidst market volatility.
See More
Chewy's Continued Growth: Autoship as the Sales Engine
- Customer Loyalty Growth: Chewy's customer-centric operations have successfully attracted a loyal consumer base, benefiting from a 9% annual growth in the U.S. pet industry since 2018, showcasing significant market potential.
- Autoship Program Success: Chewy's Autoship subscription program is projected to account for 83% of sales by 2025, becoming the company's 'sales engine,' with profitability increasing through its distribution network, driving gross margins from 20% in 2019 to 29% today.
- EBITDA Margin Improvement: Chewy's EBITDA margin has surged from -7% in 2019 to 3%, with management forecasting it to reach 10% in the future, indicating a substantial enhancement in profitability and increasing investment appeal.
- New High-Margin Growth Areas: Chewy is expanding into high-margin growth areas such as Chewy Vet Care clinics and advertising, which are expected to generate higher revenues and profits, further solidifying its market position.
See More
Three Stocks to Buy and Hold for the Next Decade
- Carvana Growth Potential: Carvana sold nearly 600,000 vehicles in 2024, a 43% increase, and despite its small market share, it is expected to benefit from the growing trend of online car purchases, driving revenue growth and record profits in the coming years.
- Chewy's Market Strategy: Chewy's quarterly revenue reached $3.26 billion, with 84% coming from 'autoship' customers, showcasing its competitive edge in the pet supply e-commerce sector, and it is likely to continue attracting consumers seeking convenience.
- SoFi Customer Growth: As of last year, SoFi Technologies served 13.7 million unique customers, a 35% year-over-year increase, and in the increasingly digital banking landscape in the U.S., SoFi meets consumer demand for convenience, positioning itself for strong growth ahead.
- Online Shopping Trend: With more consumers shifting to online shopping, companies like Carvana, Chewy, and SoFi are at the forefront of industry transformation, poised for sustained business expansion and market share growth over the next decade.
See More
Chewy Stock Poised for Rebound Amid Growth Prospects
- Profitability Improvement: Chewy achieved profitability in 2022, and despite a 78% drop in stock price, its autoship program accounts for 83% of net sales, demonstrating strong customer retention in a competitive market.
- New Business Expansion: Chewy has introduced a pet pharmacy, telehealth services, and the Chewy+ subscription service; although currently operating only 18 clinics in five states, these new ventures present significant growth potential for future sales.
- Valuation Changes: With a P/E ratio of 50, Chewy's valuation appears high, yet it compares favorably to Amazon during its e-commerce growth phase, and its P/S ratio has dropped to 0.9, indicating a reassessment of its value proposition by the market.
- Future Growth Expectations: Analysts forecast a 26% profit growth for Chewy this year and 24% by 2027, and as investors recognize its low valuation and ongoing growth, more capital is likely to flow into the stock, supporting its rebound.
See More
Chewy's Stock Shows Signs of Potential Rebound
- Sustained Sales Growth: Despite Chewy's stock price dropping approximately 78% since its peak in 2021, the company continues to see net sales growth, demonstrating its strong sales capabilities in a competitive market, particularly as consumers return to offline shopping post-pandemic.
- Improved Profitability: Chewy achieved profitability in 2022, and although its price-to-earnings (P/E) ratio stands at 50, it remains comparable to Amazon's performance during its e-commerce growth phase, indicating significant improvements in the company's profitability and market competitiveness.
- Expansion of New Services: Chewy has introduced new lines of business, including a pet pharmacy, telehealth services, and the Chewy+ subscription service, which enhances customer loyalty; currently, the autoship service accounts for 83% of its net sales, laying a solid foundation for future growth.
- Positive Future Projections: Analysts forecast a 26% profit growth for Chewy this year and 24% by 2027, and as investors become more aware of its low valuation and ongoing growth, Chewy's stock is likely to attract more buying interest, potentially driving a rebound in its stock price.
See More
Chewy Reports Strong Earnings Amid Stock Decline, Potential Buy Opportunity
- Strong Financial Performance: Chewy's Q4 and fiscal 2025 results showed net sales rising over 6% to $12.6 billion, with operating income more than doubling from $112.6 million in 2024 to $254.3 million, demonstrating resilience amid challenges.
- Positive Growth Outlook: For fiscal 2026, Chewy projects revenue growth of around 8%, forecasting total revenue between $13.6 billion and $13.75 billion, slightly exceeding analyst expectations, indicating robust customer engagement.
- Attractive Stock Valuation: Despite a 21% decline in stock price at the start of 2026, Chewy's forward P/E ratio stands at just 17, significantly lower than the S&P 500's average of over 20, suggesting the stock is undervalued and appealing for long-term investors.
- Market Competitiveness: Chewy's business remains resilient without relying on price increases, positioning it as a strong candidate for long-term investment, particularly as the pet industry continues to grow steadily.
See More
Chewy Reports 6% Revenue Growth, Outlook Positive
- Revenue Growth: Chewy's net sales increased by 6% in fiscal 2025, totaling $12.6 billion, demonstrating the resilience of its business model and potentially attracting long-term investors.
- Operating Income Doubling: The company's operating income more than doubled from $112.6 million in 2024 to $254.3 million in 2025, indicating a significant improvement in profitability and boosting market confidence.
- Positive Outlook: Chewy projects an 8% revenue growth for fiscal 2026, with expected total revenue between $13.6 billion and $13.75 billion, surpassing analyst expectations and reflecting an increase in active customers.
- Attractive Valuation: Chewy's forward price-to-earnings ratio stands at just 17, lower than the S&P 500's 20, suggesting that its stock is relatively cheap and presents an opportunity for long-term investors amidst market volatility.
See More
