CHWY Should I Buy
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Chewy Inc (CHWY) is not a strong buy for a beginner, long-term investor at this time. While the stock is trading at an all-time low valuation and has potential for long-term growth, the technical indicators are bearish, hedge funds and insiders are selling, and there are no immediate positive catalysts to suggest a strong recovery in the near term. The investment may be better suited for those willing to wait for clearer signs of recovery or improved sentiment.
The technical indicators for CHWY are bearish. The MACD histogram is negative and contracting, the RSI is neutral at 29.501, and moving averages are bearish (SMA_200 > SMA_20 > SMA_5). The stock is trading near its support level of 18.026, with resistance levels at 19.455 and 20.883. The stock has a 40% chance to decline by -1.91% in the next day and a 21.51% chance to rise in the next month, indicating mixed short-term trends.
Chewy achieved $12.6 billion in FY 2025 revenue, growing by 6.2%.
The company added over 200,000 active customers in the recent quarter, driving a 7.7% year-over-year sales increase.
Analysts view the stock as attractively valued at current levels, with potential for long-term growth.
Hedge funds and insiders are selling heavily, with insider selling increasing by 2640.37% in the last month.
Analysts have significantly lowered price targets, citing softer macro trends, unimpressive organic growth, and muted forward catalysts.
The company's net margin decreased to 1.8% due to investments in veterinary services, indicating profitability challenges.
Competition from Amazon and Walmart adds pressure to Chewy's market position.
Chewy achieved $12.6 billion in FY 2025 revenue, growing by 6.2%. However, the net margin decreased to 1.8% due to investments in veterinary services, reflecting challenges in maintaining profitability.
Analysts have mixed views on CHWY. While many maintain Buy or Outperform ratings, price targets have been significantly lowered (e.g., Goldman Sachs lowered from $46 to $34, Citi from $37 to $31). Analysts cite softer macro trends, unimpressive growth, and muted catalysts as reasons for the downgrades, but some still see the stock as attractively valued at current levels.
