Chewy Faces Challenges and Opportunities for Shareholders
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3d ago
0mins
Should l Buy CHWY?
Source: Fool
- Stable Revenue Growth: Chewy's Q3 revenue reached $3.1 billion, marking an 8.3% year-over-year increase, indicating the company's solid position in the online pet supply market, which is likely to continue attracting investor interest.
- Profitability Shift: Chewy has successfully turned profitable, with 83.9% of Q3 revenue coming from subscription customers, up from 80% a year earlier, highlighting significant improvements in customer retention and revenue stability.
- Market Share Competition: Chewy and Amazon each hold about one-third of the online pet supply market, and despite fierce competition, its unique e-commerce model allows it to maintain competitiveness, with potential for further market share expansion.
- Stock Price Potential: Although Chewy's stock has fallen over 80% from its peak, its current P/E ratio of 22 is significantly lower than analysts' 12-month target price of $46.19, indicating potential for a price rebound that may attract long-term investors.
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Analyst Views on CHWY
Wall Street analysts forecast CHWY stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CHWY is 47.06 USD with a low forecast of 42.00 USD and a high forecast of 52.00 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.
20 Analyst Rating
17 Buy
3 Hold
0 Sell
Strong Buy
Current: 26.570
Low
42.00
Averages
47.06
High
52.00
Current: 26.570
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 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 Faces Challenges and Opportunities for Shareholders
- Stable Revenue Growth: Chewy's Q3 revenue reached $3.1 billion, marking an 8.3% year-over-year increase, indicating the company's solid position in the online pet supply market, which is likely to continue attracting investor interest.
- Profitability Shift: Chewy has successfully turned profitable, with 83.9% of Q3 revenue coming from subscription customers, up from 80% a year earlier, highlighting significant improvements in customer retention and revenue stability.
- Market Share Competition: Chewy and Amazon each hold about one-third of the online pet supply market, and despite fierce competition, its unique e-commerce model allows it to maintain competitiveness, with potential for further market share expansion.
- Stock Price Potential: Although Chewy's stock has fallen over 80% from its peak, its current P/E ratio of 22 is significantly lower than analysts' 12-month target price of $46.19, indicating potential for a price rebound that may attract long-term investors.
See More
Chewy and Dutch Bros Show Strong Growth Potential
- Chewy's Growth Potential: Chewy's forward P/E ratio stands at 18.5, with projected sales growth exceeding 8.5% for fiscal 2026, primarily driven by over 80% of sales from auto-ship customers, showcasing its stability and recession-resistant nature in the retail sector.
- Margin Expansion: Chewy is enhancing its gross margins through high-margin sponsored ads and a new paid membership program, with private label brands offering margins up to 700 basis points higher than national brands, which is expected to propel profit growth in the coming years.
- Dutch Bros Expansion Plans: Dutch Bros achieved a 5.7% increase in same-store sales in Q3 and plans to more than double its locations from 1,100 to 2,029 by 2029, indicating strong market expansion potential.
- Food Innovation Driving Sales: The introduction of hot food items at Dutch Bros has shown a 4% lift in comparable-store sales during early pilots, which will further enhance sales growth and support its national expansion strategy across the U.S.
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 Faces Challenges and Opportunities for Shareholders
- Stable Revenue Growth: Chewy's Q3 revenue reached $3.1 billion, marking an 8.3% year-over-year increase, indicating the company's solid position in the online pet supply market, which is likely to continue attracting investor interest.
- Profitability Shift: Chewy has successfully turned profitable, with 83.9% of Q3 revenue coming from subscription customers, up from 80% a year earlier, highlighting significant improvements in customer retention and revenue stability.
- Market Share Competition: Chewy and Amazon each hold about one-third of the online pet supply market, and despite fierce competition, its unique e-commerce model allows it to maintain competitiveness, with potential for further market share expansion.
- Stock Price Potential: Although Chewy's stock has fallen over 80% from its peak, its current P/E ratio of 22 is significantly lower than analysts' 12-month target price of $46.19, indicating potential for a price rebound that may attract long-term investors.
See More
Chewy and Dutch Bros Show Strong Growth Potential
- Chewy's Growth Potential: Chewy's forward P/E ratio stands at 18.5, with projected sales growth exceeding 8.5% for fiscal 2026, primarily driven by over 80% of sales from auto-ship customers, showcasing its stability and recession-resistant nature in the retail sector.
- Margin Expansion: Chewy is enhancing its gross margins through high-margin sponsored ads and a new paid membership program, with private label brands offering margins up to 700 basis points higher than national brands, which is expected to propel profit growth in the coming years.
- Dutch Bros Expansion Plans: Dutch Bros achieved a 5.7% increase in same-store sales in Q3 and plans to more than double its locations from 1,100 to 2,029 by 2029, indicating strong market expansion potential.
- Food Innovation Driving Sales: The introduction of hot food items at Dutch Bros has shown a 4% lift in comparable-store sales during early pilots, which will further enhance sales growth and support its national expansion strategy across the U.S.
See More
