Market Competition Analysis: Chewy vs. Walmart
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- Market Growth Outlook: Grandview Research projects a 5.1% compound annual growth rate for the pet care market until 2030, indicating that while Chewy has a niche in the pet industry, its low profit margins limit future growth opportunities.
- Profit Margin Comparison: Chewy's net profit margin hovers around 2%, whereas Walmart's typically ranges from 3% to 4%, highlighting Walmart's stronger profitability in the retail sector despite both facing low-margin challenges.
- Advertising Revenue Surge: Walmart's global advertising sales surged by 53% year-over-year in Q3 FY26, providing an opportunity to boost profits even if sales growth remains in the low single digits, showcasing its potential for diversified revenue streams.
- Valuation Discrepancy: Chewy's P/E ratio of 67 significantly exceeds Walmart's 42, and despite similar growth rates, Chewy's high valuation poses greater risks, as evidenced by its nearly 70% stock price decline over the past five years, reflecting market concerns about its future growth.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for WMT is 125.75 USD with a low forecast of 119.00 USD and a high forecast of 136.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 117.410
Low
119.00
Averages
125.75
High
136.00
Current: 117.410
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
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.
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Market Competition Analysis: Chewy vs. Walmart
- Market Growth Outlook: Grandview Research projects a 5.1% compound annual growth rate for the pet care market until 2030, indicating that while Chewy has a niche in the pet industry, its low profit margins limit future growth opportunities.
- Profit Margin Comparison: Chewy's net profit margin hovers around 2%, whereas Walmart's typically ranges from 3% to 4%, highlighting Walmart's stronger profitability in the retail sector despite both facing low-margin challenges.
- Advertising Revenue Surge: Walmart's global advertising sales surged by 53% year-over-year in Q3 FY26, providing an opportunity to boost profits even if sales growth remains in the low single digits, showcasing its potential for diversified revenue streams.
- Valuation Discrepancy: Chewy's P/E ratio of 67 significantly exceeds Walmart's 42, and despite similar growth rates, Chewy's high valuation poses greater risks, as evidenced by its nearly 70% stock price decline over the past five years, reflecting market concerns about its future growth.
Continue Reading