Chewy's Stock Plunge Hides Business Growth Potential
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy CHWY?
Source: Fool
- Market Growth Potential: The U.S. companion animal market is projected to grow at an annual rate of 8.2% from 2018 to 2025, indicating strong demand in the pet industry, with Chewy positioned at the heart of this growth trend.
- Sales Doubling: Despite an 80% drop in stock price since its 2021 peak, Chewy's trailing 12-month sales have surpassed $12.6 billion, with free cash flow reaching $487 million, indicating robust business fundamentals.
- Customer Growth and Retention: Chewy reported over 21 million active customers in Q3 2025, a 4.9% year-over-year increase, with 250,000 new customers added in the last quarter, showcasing strong performance in customer acquisition and retention.
- Future Profitability Outlook: Chewy's stock currently trades at just over 15 times 2025 earnings estimates, with analysts projecting an average earnings growth of 18% over the next three to five years, providing an attractive opportunity for investors despite intense competition.
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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: 24.230
Low
42.00
Averages
47.06
High
52.00
Current: 24.230
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 Stock Plunge Hides Business Growth Potential
- Market Growth Potential: The U.S. companion animal market is projected to grow at an annual rate of 8.2% from 2018 to 2025, indicating strong demand in the pet industry, with Chewy positioned at the heart of this growth trend.
- Sales Doubling: Despite an 80% drop in stock price since its 2021 peak, Chewy's trailing 12-month sales have surpassed $12.6 billion, with free cash flow reaching $487 million, indicating robust business fundamentals.
- Customer Growth and Retention: Chewy reported over 21 million active customers in Q3 2025, a 4.9% year-over-year increase, with 250,000 new customers added in the last quarter, showcasing strong performance in customer acquisition and retention.
- Future Profitability Outlook: Chewy's stock currently trades at just over 15 times 2025 earnings estimates, with analysts projecting an average earnings growth of 18% over the next three to five years, providing an attractive opportunity for investors despite intense competition.
See More
Chewy CEO to Participate in Morgan Stanley Conference
- Executive Participation: Chewy's CEO Sumit Singh will participate in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on March 2, 2026, showcasing the company's leadership in the pet industry.
- Live Streaming and Replay: The event will be live-streamed on the company's investor relations website, with a replay available for 90 days post-event, ensuring investors and customers can access information anytime, enhancing transparency.
- Brand Loyalty Enhancement: Chewy aims to strengthen customer brand loyalty by offering high-quality products and services, and this event is expected to further solidify its competitive advantage in the pet product market.
- Innovative Customer Engagement: The company continually develops innovative ways to engage with customers, offering approximately 130,000 products and services to enhance customer experience and drive repeat purchases, further expanding market share.
See More
Chewy CEO to Participate in Morgan Stanley Conference
- Executive Participation: Chewy's CEO Sumit Singh will engage in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on March 2, 2026, highlighting the company's leadership in the pet product sector.
- Live Streaming and Replay: The event will be live-streamed on the company's investor relations website, with a replay available for 90 days post-event, ensuring that investors and customers can access information anytime, enhancing transparency.
- Brand Loyalty Development: Chewy aims to enhance brand loyalty and drive repeat purchases by offering high-quality products and services combined with personalized customer experiences, further solidifying its market position in the pet industry.
- Product Diversity: Chewy partners with approximately 3,200 trusted brands in the pet industry, offering around 130,000 products and services to provide customers with a convenient shopping experience that meets their pets' health and merchandise needs.
See More
Chewy Grows Despite Competition from Giants
- High Customer Loyalty: Chewy maintains a strong customer loyalty despite fierce competition from giants like Amazon and Walmart, indicating its robust brand appeal and market position.
- Poor Stock Performance: Currently trading at $24.23 per share, Chewy has seen an average annual return of -35.31% over the past year, reflecting market concerns about its future growth, yet investors should focus on its long-term potential.
- Long-Term Investment Potential: Calculations suggest that investing $12,000 annually could yield $1,359,399 over 30 years, highlighting Chewy's potential as a growth stock despite its recent underperformance.
- Market Competition Risks: While Chewy excels in the pet product retail sector, it must remain vigilant against pressures from larger competitors, which could impact its future market share and profitability.
See More
Chewy Stock Investment Outlook Analysis
- Performance Growth: Chewy's third-quarter revenue increased by 8.3% year-over-year, with gross margins rising by 0.5 percentage points, indicating the company's sustained growth potential in the pet products market and boosting investor confidence in its future performance.
- Successful Autoship Service: Chewy's Autoship service accounts for 84% of total revenue, providing a stable income source that not only enhances customer loyalty but also offers predictable cash flow, further solidifying its market position.
- Attractive Valuation Levels: Chewy's forward P/E ratio stands at 24, significantly lower than its five-year average of 73, and its price-to-sales ratio is 0.82, below 1.35, suggesting that its stock is appealing in the current market environment and may offer good returns for investors.
- Competition and Loyalty: Despite competition from Amazon and Walmart, Chewy maintains a high level of customer loyalty, laying a solid foundation for future growth and demonstrating its unique advantages in the pet retail industry.
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 Stock Plunge Hides Business Growth Potential
- Market Growth Potential: The U.S. companion animal market is projected to grow at an annual rate of 8.2% from 2018 to 2025, indicating strong demand in the pet industry, with Chewy positioned at the heart of this growth trend.
- Sales Doubling: Despite an 80% drop in stock price since its 2021 peak, Chewy's trailing 12-month sales have surpassed $12.6 billion, with free cash flow reaching $487 million, indicating robust business fundamentals.
- Customer Growth and Retention: Chewy reported over 21 million active customers in Q3 2025, a 4.9% year-over-year increase, with 250,000 new customers added in the last quarter, showcasing strong performance in customer acquisition and retention.
- Future Profitability Outlook: Chewy's stock currently trades at just over 15 times 2025 earnings estimates, with analysts projecting an average earnings growth of 18% over the next three to five years, providing an attractive opportunity for investors despite intense competition.
See More
Chewy CEO to Participate in Morgan Stanley Conference
- Executive Participation: Chewy's CEO Sumit Singh will participate in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on March 2, 2026, showcasing the company's leadership in the pet industry.
- Live Streaming and Replay: The event will be live-streamed on the company's investor relations website, with a replay available for 90 days post-event, ensuring investors and customers can access information anytime, enhancing transparency.
- Brand Loyalty Enhancement: Chewy aims to strengthen customer brand loyalty by offering high-quality products and services, and this event is expected to further solidify its competitive advantage in the pet product market.
- Innovative Customer Engagement: The company continually develops innovative ways to engage with customers, offering approximately 130,000 products and services to enhance customer experience and drive repeat purchases, further expanding market share.
See More
Chewy CEO to Participate in Morgan Stanley Conference
- Executive Participation: Chewy's CEO Sumit Singh will engage in a fireside chat at the Morgan Stanley Technology, Media & Telecom Conference on March 2, 2026, highlighting the company's leadership in the pet product sector.
- Live Streaming and Replay: The event will be live-streamed on the company's investor relations website, with a replay available for 90 days post-event, ensuring that investors and customers can access information anytime, enhancing transparency.
- Brand Loyalty Development: Chewy aims to enhance brand loyalty and drive repeat purchases by offering high-quality products and services combined with personalized customer experiences, further solidifying its market position in the pet industry.
- Product Diversity: Chewy partners with approximately 3,200 trusted brands in the pet industry, offering around 130,000 products and services to provide customers with a convenient shopping experience that meets their pets' health and merchandise needs.
See More
Chewy Grows Despite Competition from Giants
- High Customer Loyalty: Chewy maintains a strong customer loyalty despite fierce competition from giants like Amazon and Walmart, indicating its robust brand appeal and market position.
- Poor Stock Performance: Currently trading at $24.23 per share, Chewy has seen an average annual return of -35.31% over the past year, reflecting market concerns about its future growth, yet investors should focus on its long-term potential.
- Long-Term Investment Potential: Calculations suggest that investing $12,000 annually could yield $1,359,399 over 30 years, highlighting Chewy's potential as a growth stock despite its recent underperformance.
- Market Competition Risks: While Chewy excels in the pet product retail sector, it must remain vigilant against pressures from larger competitors, which could impact its future market share and profitability.
See More
Chewy Stock Investment Outlook Analysis
- Performance Growth: Chewy's third-quarter revenue increased by 8.3% year-over-year, with gross margins rising by 0.5 percentage points, indicating the company's sustained growth potential in the pet products market and boosting investor confidence in its future performance.
- Successful Autoship Service: Chewy's Autoship service accounts for 84% of total revenue, providing a stable income source that not only enhances customer loyalty but also offers predictable cash flow, further solidifying its market position.
- Attractive Valuation Levels: Chewy's forward P/E ratio stands at 24, significantly lower than its five-year average of 73, and its price-to-sales ratio is 0.82, below 1.35, suggesting that its stock is appealing in the current market environment and may offer good returns for investors.
- Competition and Loyalty: Despite competition from Amazon and Walmart, Chewy maintains a high level of customer loyalty, laying a solid foundation for future growth and demonstrating its unique advantages in the pet retail industry.
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
