Chewy Stock Investment Opportunity Analysis
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy CHWY?
Source: Fool
- Customer Loyalty Advantage: Chewy boasts a net sales retention rate exceeding 100%, indicating that new customers' spending increases year-over-year, with long-term customers from the early 2010s now averaging over $1,000 in annual spending, showcasing strong customer stickiness and long-term growth potential.
- Innovative Sales Model: Chewy's Autoship program accounted for 84% of sales in Q3 2025, enhancing sales forecasting accuracy while effectively reducing inventory management and shipping costs, leading to improved operating margins, which management targets to reach 10% in the long run.
- Diversified Business Expansion: Chewy's recent foray into pet healthcare, insurance, and advertising aligns closely with its core retail operations, allowing for the sale of prescription medications alongside toys and treats monthly, thereby increasing margins without significantly raising operating expenses.
- Earnings Growth Expectations: Analysts project a 23% growth in earnings per share for Chewy this year, and with the stock trading below $25 at a price-to-earnings ratio of just 19 times, it presents an extremely attractive growth stock opportunity for potential investors considering a purchase.
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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: 24.290
Low
42.00
Averages
47.06
High
52.00
Current: 24.290
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 Stock Investment Opportunity Analysis
- Customer Loyalty Advantage: Chewy boasts a net sales retention rate exceeding 100%, indicating that new customers' spending increases year-over-year, with long-term customers from the early 2010s now averaging over $1,000 in annual spending, showcasing strong customer stickiness and long-term growth potential.
- Innovative Sales Model: Chewy's Autoship program accounted for 84% of sales in Q3 2025, enhancing sales forecasting accuracy while effectively reducing inventory management and shipping costs, leading to improved operating margins, which management targets to reach 10% in the long run.
- Diversified Business Expansion: Chewy's recent foray into pet healthcare, insurance, and advertising aligns closely with its core retail operations, allowing for the sale of prescription medications alongside toys and treats monthly, thereby increasing margins without significantly raising operating expenses.
- Earnings Growth Expectations: Analysts project a 23% growth in earnings per share for Chewy this year, and with the stock trading below $25 at a price-to-earnings ratio of just 19 times, it presents an extremely attractive growth stock opportunity for potential investors considering a purchase.
See More
Chewy's Leadership Changes Raise Investor Concerns
- Leadership Changes Impact: Chewy's stock has dropped approximately 17% since the retirement of CTO Satish Mehta last month, with the exit of the CFO last year compounding investor concerns, resulting in a total decline of over 30% since the second-quarter earnings report.
- Lack of Stability: Frequent leadership changes raise eyebrows at a time when investors are seeking stability, although Chewy's Autoship subscription service remains a primary revenue driver, accounting for 84% of net sales and demonstrating predictable business performance.
- Strong Sales Growth: In Q3, revenue flowing through Autoship rose by 13.5%, while total sales growth of 8.5% outpaced industry averages, indicating that the company has successfully expanded its active customer base and net sales per active customer by 5% each.
- Profitability Improvement: Despite challenges in the low-margin e-commerce sector, Chewy's pharmacy business leads the U.S. market, with gross margins and adjusted EBITDA margins expanding by 50 and 100 basis points in Q3, respectively, highlighting the potential for scaling this higher-margin segment.
See More
Chewy Stock Value Resurgence: A Buy Opportunity for Investors
- Financial Recovery: Chewy reported $9.3 billion in revenue for the first nine months of fiscal 2025, an 8% increase year-over-year, with operating income rising 74% to $212 million despite a drop in net income due to a $216 million tax benefit in 2024, indicating significant improvement in profitability.
- Business Line Expansion: By introducing veterinary telehealth services and pet pharmaceuticals, Chewy has successfully diversified its revenue streams, enhancing its competitive edge against rivals like Amazon and attracting more online consumers during the pandemic.
- Increased Valuation Appeal: Although Chewy's P/E ratio stands at 55, its forward P/E ratio has dropped to 17, and the price-to-sales ratio has fallen from nearly 7 in 2021 to 0.9, suggesting that the current stock price is relatively cheap and may attract more investor interest.
- Market Rebound Potential: After a significant decline and four years of stagnation, Chewy stock appears poised for a rebound, and with ongoing financial improvements and attractive low valuations, investors should consider buying before more notice its growth.
See More
Chewy Stock Is Quietly Becoming a Buy Again
- Financial Recovery: Chewy reported $9.3 billion in revenue for the first nine months of fiscal 2025, an 8% increase year-over-year, with operating income rising to $212 million, a 74% increase from the previous year, indicating strong financial health amidst growth.
- New Business Lines: By introducing veterinary telehealth services and pet pharmaceuticals, Chewy has successfully enhanced its market competitiveness and customer loyalty, leading to a stock price surge during the pandemic, despite a significant drop post-2021.
- Attractive Valuation: Chewy's price-to-sales ratio has fallen from nearly 7 in 2021 to 0.9, and while its P/E ratio of 55 seems high, a forward P/E of 17 makes the stock appear relatively cheap, potentially serving as a catalyst for breaking out of its trading range.
- Market Rebound Potential: After a massive decline and four years of stagnation, Chewy stock may be poised for a rebound, and investors should consider buying before more notice its continued growth and low valuation, seizing potential investment opportunities.
See More
Chewy Stock Valuation Attracts Investors
- Stock Trading Trend: After a significant drop in 2021, Chewy's stock has traded within a range for the past four years; however, its current valuation appears increasingly attractive to value investors, suggesting it may be a buying opportunity again.
- Financial Performance Improvement: For the first three quarters of fiscal 2025, Chewy reported $9.3 billion in revenue, an 8% increase year-over-year, and while net income fell due to a $216 million tax benefit in 2024, operating income surged by 74%, indicating ongoing financial improvement.
- Expansion of New Business Lines: By introducing veterinary telehealth services and pharmaceuticals for pets, Chewy has successfully boosted its revenue, demonstrating that its growth model in the e-commerce sector remains robust and enhancing its competitive position in the market.
- Significant Valuation Changes: Chewy's price-to-sales ratio has dropped from nearly 7 in 2021 to 0.9, and although its P/E ratio stands at 55, the forward P/E ratio of 17 suggests the stock is relatively cheap, potentially serving as a catalyst for breaking out of its trading range.
See More
Analysts Favor These 3 Stocks Approaching 52-Week Lows—Here’s the Reason
Earnings Season Insights: Analysts and investors are seeking value as earnings season begins, with 30% of respondents in a Bank of America survey anticipating a decline in AI stock valuations, leading to a potential correction in the credit market.
Investment Strategies: Retail investors are encouraged to identify stocks trading near their 52-week lows, with tools available to help screen for these opportunities, as bullish sentiment suggests potential gains before upcoming earnings reports.
Market Performance of Specific Stocks: The Trade Desk (TTD) has seen a significant decline in stock value, attributed to competition from Amazon, while analysts suggest that despite challenges, there may be a rebound opportunity based on current trading levels.
Chewy and Other Stocks: Chewy (CHWY) is highlighted as a stock trading at multi-year lows, with analysts forecasting substantial earnings growth in the next year, despite concerns over its current valuation, indicating potential for future investment.
See More
Chewy Stock Investment Opportunity Analysis
- Customer Loyalty Advantage: Chewy boasts a net sales retention rate exceeding 100%, indicating that new customers' spending increases year-over-year, with long-term customers from the early 2010s now averaging over $1,000 in annual spending, showcasing strong customer stickiness and long-term growth potential.
- Innovative Sales Model: Chewy's Autoship program accounted for 84% of sales in Q3 2025, enhancing sales forecasting accuracy while effectively reducing inventory management and shipping costs, leading to improved operating margins, which management targets to reach 10% in the long run.
- Diversified Business Expansion: Chewy's recent foray into pet healthcare, insurance, and advertising aligns closely with its core retail operations, allowing for the sale of prescription medications alongside toys and treats monthly, thereby increasing margins without significantly raising operating expenses.
- Earnings Growth Expectations: Analysts project a 23% growth in earnings per share for Chewy this year, and with the stock trading below $25 at a price-to-earnings ratio of just 19 times, it presents an extremely attractive growth stock opportunity for potential investors considering a purchase.
See More
Chewy's Leadership Changes Raise Investor Concerns
- Leadership Changes Impact: Chewy's stock has dropped approximately 17% since the retirement of CTO Satish Mehta last month, with the exit of the CFO last year compounding investor concerns, resulting in a total decline of over 30% since the second-quarter earnings report.
- Lack of Stability: Frequent leadership changes raise eyebrows at a time when investors are seeking stability, although Chewy's Autoship subscription service remains a primary revenue driver, accounting for 84% of net sales and demonstrating predictable business performance.
- Strong Sales Growth: In Q3, revenue flowing through Autoship rose by 13.5%, while total sales growth of 8.5% outpaced industry averages, indicating that the company has successfully expanded its active customer base and net sales per active customer by 5% each.
- Profitability Improvement: Despite challenges in the low-margin e-commerce sector, Chewy's pharmacy business leads the U.S. market, with gross margins and adjusted EBITDA margins expanding by 50 and 100 basis points in Q3, respectively, highlighting the potential for scaling this higher-margin segment.
See More
Chewy Stock Value Resurgence: A Buy Opportunity for Investors
- Financial Recovery: Chewy reported $9.3 billion in revenue for the first nine months of fiscal 2025, an 8% increase year-over-year, with operating income rising 74% to $212 million despite a drop in net income due to a $216 million tax benefit in 2024, indicating significant improvement in profitability.
- Business Line Expansion: By introducing veterinary telehealth services and pet pharmaceuticals, Chewy has successfully diversified its revenue streams, enhancing its competitive edge against rivals like Amazon and attracting more online consumers during the pandemic.
- Increased Valuation Appeal: Although Chewy's P/E ratio stands at 55, its forward P/E ratio has dropped to 17, and the price-to-sales ratio has fallen from nearly 7 in 2021 to 0.9, suggesting that the current stock price is relatively cheap and may attract more investor interest.
- Market Rebound Potential: After a significant decline and four years of stagnation, Chewy stock appears poised for a rebound, and with ongoing financial improvements and attractive low valuations, investors should consider buying before more notice its growth.
See More
Chewy Stock Is Quietly Becoming a Buy Again
- Financial Recovery: Chewy reported $9.3 billion in revenue for the first nine months of fiscal 2025, an 8% increase year-over-year, with operating income rising to $212 million, a 74% increase from the previous year, indicating strong financial health amidst growth.
- New Business Lines: By introducing veterinary telehealth services and pet pharmaceuticals, Chewy has successfully enhanced its market competitiveness and customer loyalty, leading to a stock price surge during the pandemic, despite a significant drop post-2021.
- Attractive Valuation: Chewy's price-to-sales ratio has fallen from nearly 7 in 2021 to 0.9, and while its P/E ratio of 55 seems high, a forward P/E of 17 makes the stock appear relatively cheap, potentially serving as a catalyst for breaking out of its trading range.
- Market Rebound Potential: After a massive decline and four years of stagnation, Chewy stock may be poised for a rebound, and investors should consider buying before more notice its continued growth and low valuation, seizing potential investment opportunities.
See More
Chewy Stock Valuation Attracts Investors
- Stock Trading Trend: After a significant drop in 2021, Chewy's stock has traded within a range for the past four years; however, its current valuation appears increasingly attractive to value investors, suggesting it may be a buying opportunity again.
- Financial Performance Improvement: For the first three quarters of fiscal 2025, Chewy reported $9.3 billion in revenue, an 8% increase year-over-year, and while net income fell due to a $216 million tax benefit in 2024, operating income surged by 74%, indicating ongoing financial improvement.
- Expansion of New Business Lines: By introducing veterinary telehealth services and pharmaceuticals for pets, Chewy has successfully boosted its revenue, demonstrating that its growth model in the e-commerce sector remains robust and enhancing its competitive position in the market.
- Significant Valuation Changes: Chewy's price-to-sales ratio has dropped from nearly 7 in 2021 to 0.9, and although its P/E ratio stands at 55, the forward P/E ratio of 17 suggests the stock is relatively cheap, potentially serving as a catalyst for breaking out of its trading range.
See More
Analysts Favor These 3 Stocks Approaching 52-Week Lows—Here’s the Reason
Earnings Season Insights: Analysts and investors are seeking value as earnings season begins, with 30% of respondents in a Bank of America survey anticipating a decline in AI stock valuations, leading to a potential correction in the credit market.
Investment Strategies: Retail investors are encouraged to identify stocks trading near their 52-week lows, with tools available to help screen for these opportunities, as bullish sentiment suggests potential gains before upcoming earnings reports.
Market Performance of Specific Stocks: The Trade Desk (TTD) has seen a significant decline in stock value, attributed to competition from Amazon, while analysts suggest that despite challenges, there may be a rebound opportunity based on current trading levels.
Chewy and Other Stocks: Chewy (CHWY) is highlighted as a stock trading at multi-year lows, with analysts forecasting substantial earnings growth in the next year, despite concerns over its current valuation, indicating potential for future investment.
See More
