Chewy's 23% Stock Price Decline Analysis
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
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Should l Buy CHWY?
Source: Fool
- Revenue Growth: Chewy's revenue surged from $4.8 billion in fiscal 2019 to $10.1 billion in fiscal 2022, showcasing significant growth driven by increased pet product demand during the pandemic, although this momentum has slowed as life normalizes.
- Active Customer Growth: As of Q3 fiscal 2025, Chewy's active customer count rose by 4.9% year-over-year to 21.2 million, with sales per active customer also increasing to $595, indicating effective strategies in customer retention and sales growth.
- Delivery Service Revenue: Revenue from Chewy's delivery service grew by 13.6% to $2.6 billion, demonstrating success in maintaining customer loyalty and providing a stable revenue stream, despite an overall revenue growth rate of 8.3%.
- Valuation Analysis: Despite the stock price drop, Chewy's P/E ratio remains at 52, significantly higher than the S&P 500's 29, reflecting high market expectations for future growth, prompting investors to carefully assess the investment opportunity.
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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: 24.600
Low
42.00
Averages
47.06
High
52.00
Current: 24.600
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 23% Stock Price Decline Analysis
- Revenue Growth: Chewy's revenue surged from $4.8 billion in fiscal 2019 to $10.1 billion in fiscal 2022, showcasing significant growth driven by increased pet product demand during the pandemic, although this momentum has slowed as life normalizes.
- Active Customer Growth: As of Q3 fiscal 2025, Chewy's active customer count rose by 4.9% year-over-year to 21.2 million, with sales per active customer also increasing to $595, indicating effective strategies in customer retention and sales growth.
- Delivery Service Revenue: Revenue from Chewy's delivery service grew by 13.6% to $2.6 billion, demonstrating success in maintaining customer loyalty and providing a stable revenue stream, despite an overall revenue growth rate of 8.3%.
- Valuation Analysis: Despite the stock price drop, Chewy's P/E ratio remains at 52, significantly higher than the S&P 500's 29, reflecting high market expectations for future growth, prompting investors to carefully assess the investment opportunity.
See More
Chewy's Stock Underperformance Amidst Modest Growth
- Stock Underperformance: Chewy's stock has dropped approximately 23% this year, significantly underperforming the S&P 500 by about 22 percentage points, indicating investor concerns regarding its future growth prospects.
- Modest Revenue Growth: Although Chewy's revenue reached $10.1 billion in fiscal 2022, up from $4.8 billion in 2019, the growth rate has slowed to 8.3% as life returns to normal post-pandemic, raising questions about the sustainability of this growth.
- Increased Customer Engagement: As of Q3 fiscal 2025, Chewy's active customer base grew by 4.9% year-over-year to 21.2 million, with sales per active customer also rising to $595, demonstrating some success in customer retention and acquisition efforts.
- Valuation Risks: With a price-to-earnings ratio of 52, down from 68 at the end of 2025 but still significantly above the S&P 500's 29, the market reflects high growth expectations for Chewy, suggesting that failure to meet these expectations could lead to further stock price declines.
See More
Chewy Stock Pullback May Present Buying Opportunity
- Strong Sales Growth: Chewy has achieved over 8% revenue growth each quarter in the past fiscal year, with an 8.3% increase in the last quarter, demonstrating robust performance in the pet food and essentials market, particularly with a 16% year-over-year spending increase from autoship customers.
- Attractive Valuation: Despite deriving 84% of its sales from autoship customers and primarily selling necessities, Chewy's forward P/E ratio stands at just 16.5 times, significantly lower than peers like Walmart and Costco, indicating that its stock is appealing in the current market.
- Margin Improvement: By introducing a paid membership program and expanding private label offerings, Chewy increased its gross margin by 50 basis points to 29.8% in Q3, while its EBITDA margin expanded by 100 basis points to 5.8%, reflecting the company's efforts to enhance operational efficiency.
- Sustained Growth Potential: Although user growth shows signs of maturation, Chewy is still on track to achieve its 10% EBITDA margin goal, and with its stable revenue model and attractive valuation, it presents significant investment value in the market.
See More
Chewy Stock Analysis: Attractive Growth Opportunity
- Strong Sales Growth: Chewy has achieved over 8% revenue growth each quarter in the past year, with an 8.3% increase in the last quarter, indicating robust demand in the pet food and essentials market, particularly with a 16% rise in spending from autoship customers.
- Attractive Valuation: With a forward P/E ratio of just 16.5, significantly lower than peers like Walmart and Costco, Chewy's valuation presents a compelling buying opportunity for investors looking for defensive retail stocks.
- Margin Improvement: By introducing a paid membership program and expanding private label offerings, Chewy has increased its gross margin by 50 basis points to 29.8% in Q3, while its EBITDA margin rose by 100 basis points to 5.8%, reflecting the company's focus on operational efficiency.
- Expanding Customer Base: Chewy's active customer base continues to grow, with average annual spending nearing $600, and despite signs of maturing user growth, overall sales remain strong, positioning the company to achieve its 10% EBITDA margin goal in the coming years.
See More
Quality Stocks on Sale: Investment Opportunities Arise
- AWS Growth Surge: Amazon's cloud division, AWS, recently achieved an annual revenue run rate of $142 billion, benefiting from the AI boom, indicating strong market demand that is expected to drive future profitability for the company.
- Chewy Customer Loyalty: Chewy's Autoship service accounts for over 80% of sales from loyal customers, with the company continuing to enhance profitability while expanding revenue sources through initiatives like opening veterinary clinics.
- Apple's Innovation Edge: Apple's leadership in the smartphone market, with the iPhone topping global sales last year, coupled with ongoing innovation and strong brand loyalty, has resulted in stable revenue growth, with service revenues reaching record highs.
- Attractive Investment Valuations: Amazon, Chewy, and Apple have forward P/E ratios of 27x, 16x, and 30x respectively, making their current stock prices relatively cheap and presenting excellent buying opportunities for investors, especially during market fluctuations.
See More
Bumble Shares Surge 21% on Strong Q4 Results and Positive Guidance
- Bumble's Strong Earnings: Bumble's fourth-quarter results showed strong adjusted EBITDA and revenue, leading to a 21% surge in shares, indicating robust performance in the competitive dating app market and likely attracting further investor interest.
- Netskope's Weak Guidance: Netskope anticipates an adjusted loss of 6 to 7 cents per share for Q1, worse than the 6 cents expected by analysts, resulting in a 17% drop in shares, reflecting market concerns over its future profitability and potential impact on funding.
- Petco's Positive Outlook: Petco's guidance for Q1 adjusted EBITDA between $92 million and $94 million exceeded analyst expectations, causing shares to rise 12%, highlighting strong demand and growth potential in the pet products and services market.
- Hims & Hers Stock Rise: Hims & Hers shares increased over 5% following Eli Lilly's warning about health risks associated with its weight-loss drug, demonstrating market sensitivity to health product issues and investor confidence in the company's future growth.
See More
Chewy's 23% Stock Price Decline Analysis
- Revenue Growth: Chewy's revenue surged from $4.8 billion in fiscal 2019 to $10.1 billion in fiscal 2022, showcasing significant growth driven by increased pet product demand during the pandemic, although this momentum has slowed as life normalizes.
- Active Customer Growth: As of Q3 fiscal 2025, Chewy's active customer count rose by 4.9% year-over-year to 21.2 million, with sales per active customer also increasing to $595, indicating effective strategies in customer retention and sales growth.
- Delivery Service Revenue: Revenue from Chewy's delivery service grew by 13.6% to $2.6 billion, demonstrating success in maintaining customer loyalty and providing a stable revenue stream, despite an overall revenue growth rate of 8.3%.
- Valuation Analysis: Despite the stock price drop, Chewy's P/E ratio remains at 52, significantly higher than the S&P 500's 29, reflecting high market expectations for future growth, prompting investors to carefully assess the investment opportunity.
See More
Chewy's Stock Underperformance Amidst Modest Growth
- Stock Underperformance: Chewy's stock has dropped approximately 23% this year, significantly underperforming the S&P 500 by about 22 percentage points, indicating investor concerns regarding its future growth prospects.
- Modest Revenue Growth: Although Chewy's revenue reached $10.1 billion in fiscal 2022, up from $4.8 billion in 2019, the growth rate has slowed to 8.3% as life returns to normal post-pandemic, raising questions about the sustainability of this growth.
- Increased Customer Engagement: As of Q3 fiscal 2025, Chewy's active customer base grew by 4.9% year-over-year to 21.2 million, with sales per active customer also rising to $595, demonstrating some success in customer retention and acquisition efforts.
- Valuation Risks: With a price-to-earnings ratio of 52, down from 68 at the end of 2025 but still significantly above the S&P 500's 29, the market reflects high growth expectations for Chewy, suggesting that failure to meet these expectations could lead to further stock price declines.
See More
Chewy Stock Pullback May Present Buying Opportunity
- Strong Sales Growth: Chewy has achieved over 8% revenue growth each quarter in the past fiscal year, with an 8.3% increase in the last quarter, demonstrating robust performance in the pet food and essentials market, particularly with a 16% year-over-year spending increase from autoship customers.
- Attractive Valuation: Despite deriving 84% of its sales from autoship customers and primarily selling necessities, Chewy's forward P/E ratio stands at just 16.5 times, significantly lower than peers like Walmart and Costco, indicating that its stock is appealing in the current market.
- Margin Improvement: By introducing a paid membership program and expanding private label offerings, Chewy increased its gross margin by 50 basis points to 29.8% in Q3, while its EBITDA margin expanded by 100 basis points to 5.8%, reflecting the company's efforts to enhance operational efficiency.
- Sustained Growth Potential: Although user growth shows signs of maturation, Chewy is still on track to achieve its 10% EBITDA margin goal, and with its stable revenue model and attractive valuation, it presents significant investment value in the market.
See More
Chewy Stock Analysis: Attractive Growth Opportunity
- Strong Sales Growth: Chewy has achieved over 8% revenue growth each quarter in the past year, with an 8.3% increase in the last quarter, indicating robust demand in the pet food and essentials market, particularly with a 16% rise in spending from autoship customers.
- Attractive Valuation: With a forward P/E ratio of just 16.5, significantly lower than peers like Walmart and Costco, Chewy's valuation presents a compelling buying opportunity for investors looking for defensive retail stocks.
- Margin Improvement: By introducing a paid membership program and expanding private label offerings, Chewy has increased its gross margin by 50 basis points to 29.8% in Q3, while its EBITDA margin rose by 100 basis points to 5.8%, reflecting the company's focus on operational efficiency.
- Expanding Customer Base: Chewy's active customer base continues to grow, with average annual spending nearing $600, and despite signs of maturing user growth, overall sales remain strong, positioning the company to achieve its 10% EBITDA margin goal in the coming years.
See More
Quality Stocks on Sale: Investment Opportunities Arise
- AWS Growth Surge: Amazon's cloud division, AWS, recently achieved an annual revenue run rate of $142 billion, benefiting from the AI boom, indicating strong market demand that is expected to drive future profitability for the company.
- Chewy Customer Loyalty: Chewy's Autoship service accounts for over 80% of sales from loyal customers, with the company continuing to enhance profitability while expanding revenue sources through initiatives like opening veterinary clinics.
- Apple's Innovation Edge: Apple's leadership in the smartphone market, with the iPhone topping global sales last year, coupled with ongoing innovation and strong brand loyalty, has resulted in stable revenue growth, with service revenues reaching record highs.
- Attractive Investment Valuations: Amazon, Chewy, and Apple have forward P/E ratios of 27x, 16x, and 30x respectively, making their current stock prices relatively cheap and presenting excellent buying opportunities for investors, especially during market fluctuations.
See More
Bumble Shares Surge 21% on Strong Q4 Results and Positive Guidance
- Bumble's Strong Earnings: Bumble's fourth-quarter results showed strong adjusted EBITDA and revenue, leading to a 21% surge in shares, indicating robust performance in the competitive dating app market and likely attracting further investor interest.
- Netskope's Weak Guidance: Netskope anticipates an adjusted loss of 6 to 7 cents per share for Q1, worse than the 6 cents expected by analysts, resulting in a 17% drop in shares, reflecting market concerns over its future profitability and potential impact on funding.
- Petco's Positive Outlook: Petco's guidance for Q1 adjusted EBITDA between $92 million and $94 million exceeded analyst expectations, causing shares to rise 12%, highlighting strong demand and growth potential in the pet products and services market.
- Hims & Hers Stock Rise: Hims & Hers shares increased over 5% following Eli Lilly's warning about health risks associated with its weight-loss drug, demonstrating market sensitivity to health product issues and investor confidence in the company's future growth.
See More
