Shares of Chewy (CHWY) are rising on Dec. 10 after the online pet-food retailer delivered better-than-expected financial results.
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The company reported earnings per share (EPS) of $0.32 for its fiscal third quarter, beating Wall Street’s consensus forecast of $0.30. Revenue in the period totaled $3.12 billion, which topped the $3.10 billion expected among analysts. Sales were up 8.3% from a year earlier.
Despite the strong print, Chewy’s guidance for the fourth quarter came up short. The company said it expects earnings of $0.24 to $0.27, which was below analysts’ expectations of $0.29. The sales estimate of $3.24 billion to $3.26 billion also came in slightly below Wall Street’s forecast.
Focusing on the Positives at Chewy
Chewy’s stock initially fell 4% in premarket trading on Dec. 10 before recovering and rising. Analysts say that investors appear to be looking past the guidance provided by the company and choosing to focus on the positives at Chewy.
In the earnings release, Chewy CEO Sumit Singh said, “Chewy continues to outperform the pet category and expand market share, with profits once again growing faster than sales.” CHWY stock suffered a dramatic post-earnings drop last quarter, and is currently up 5% on the year.
Is CHWY Stock a Buy?
Chewy’s stock has a consensus Strong Buy rating among 21 Wall Street analysts. That rating is based on 16 Buy and five Hold recommendations issued in the last three months. The average CHWY price target of $46.60 implies 32.24% upside from current levels.
