Chewy (CHWY) AI Stock Analysis

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Chewy

(NYSE:CHWY)

Rating:68Neutral

Price Target:

$38.00

▲(5.50% Upside)

Chewy's strong financial performance and positive earnings call sentiment are significant strengths, highlighting robust sales growth and strategic initiatives. However, the high valuation and bearish technical indicators present risks. The company's focus on enhancing customer experiences and expanding market share supports its growth potential.

Positive Factors

Revenue Growth

Chewy's consistent revenue growth, driven by strong sales in the Autoship program and hard goods, indicates robust market demand and effective customer engagement strategies.

Gross Margin Expansion

Improved gross margins reflect Chewy's strong pricing power and cost management, enhancing profitability and competitive positioning in the e-commerce sector.

Product Innovation

The introduction of new product lines like 'Get Real' demonstrates Chewy's commitment to innovation and expanding its product offerings, potentially increasing customer loyalty and market share.

Negative Factors

High Liabilities

Chewy's high liabilities compared to assets could pose financial risks, limiting flexibility and increasing vulnerability to economic downturns if not managed effectively.

SG&A Deleveraging

Increased SG&A expenses may pressure profitability, reflecting challenges in scaling operations efficiently as Chewy expands its fulfillment capabilities.

Inbound Processing Costs

Rising inbound processing costs could impact margins if persistent, highlighting potential vulnerabilities in supply chain management and cost control.

Chewy (CHWY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.94B

Dividend YieldN/A

Average Volume (3M)7.31M

Price to Earnings (P/E)101.6

Beta (1Y)1.16

Revenue Growth9.04%

EPS Growth-56.79%

CountryUS

Employees18,000

SectorConsumer Cyclical

Sector Strength75

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.14

Shares Outstanding225,061,520

10 Day Avg. Volume9,159,250

30 Day Avg. Volume7,310,792

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)61.46

Price to Sales (P/S)1.35

P/FCF Ratio35.52

Enterprise Value/Market Cap1.03

Enterprise Value/Revenue1.24

Enterprise Value/Gross Profit4.21

Enterprise Value/Ebitda57.49

Forecast

1Y Price Target

$46.00

Price Target Upside27.71% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering22

Chewy Business Overview & Revenue Model

Company DescriptionChewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. The company provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its www.chewy.com retail Website, as well as its mobile applications. It offers approximately 100,000 products from 3,000 partner brands. The company was founded in 2010 and is headquartered in Dania Beach, Florida.

How the Company Makes MoneyChewy generates revenue primarily through the sale of pet products on its e-commerce platform. The company's key revenue streams include direct sales of pet food, supplies, and accessories, as well as subscription services like Autoship, which allows customers to schedule regular deliveries at discounted prices. Additionally, Chewy has developed a growing presence in pet health services, including veterinary telehealth consultations and prescription medications, further diversifying its revenue base. Significant partnerships with major pet product manufacturers and brands enhance its product offerings and attract customers. Chewy's extensive customer loyalty program and emphasis on customer satisfaction also contribute to repeat purchases, driving consistent revenue growth.

Chewy Key Performance Indicators (KPIs)

Any

Active Customers

Active Customers
Indicates the total number of customers making purchases, reflecting the company's market reach and customer base growth.

Chart InsightsChewy's active customer base experienced a plateau from 2021 to 2023, reflecting market saturation or competitive pressures. However, recent quarters show a resurgence in growth, indicating successful customer retention strategies or new customer acquisition efforts. This turnaround could signal effective marketing initiatives or enhanced product offerings, positioning Chewy for renewed expansion in the pet e-commerce market.

Data provided by:

Main Street Data

Chewy Earnings Call Summary

Earnings Call Date:Sep 10, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Dec 04, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong sales growth and gross margin expansion, driven by the Autoship program and the launch of new private brands. Despite some challenges with SG&A deleverage and temporary cost increases, the overall performance and strategic initiatives position Chewy well for future growth.

Q2-2025 Updates

Positive Updates

Strong Net Sales Growth

Q2 net sales grew by nearly 9% year-over-year to $3.1 billion, exceeding the high end of the guidance range, with strength in Autoship program and hard goods business.

Record Autoship Customer Sales

Autoship customer sales reached $2.58 billion, representing 83% of Q2 net sales, setting a new record for the company.

Gross Margin Expansion

Gross margin reached 30.4%, expanding nearly 80 and 90 basis points sequentially and year-over-year, respectively.

Launch of 'Get Real' Private Brand

Chewy launched 'Get Real,' a new exclusive private brand of healthy fresh dog food, with strong initial customer reception.

Increased Free Cash Flow and Share Repurchases

Generated nearly $106 million in free cash flow and repurchased approximately $125 million worth of shares in the quarter.

Negative Updates

SG&A Deleveraging

SG&A expenses deleveraged approximately 30 basis points year-over-year, driven by the ramp of the Houston fulfillment center and higher inbound inventory processing costs.

Temporary Increase in Inbound Processing Costs

Higher inbound inventory processing costs, primarily within hard goods, were incurred to mitigate tariff impacts and ensure adequate holiday inventory.

Company Guidance

During Chewy's Second Quarter 2025 Earnings Call, CEO Sumit Singh highlighted the company's robust financial performance, surpassing guidance with net sales reaching $3.1 billion, a 9% year-over-year increase. Key metrics included a record high 83% Autoship customer sales, totaling $2.58 billion. The hard goods segment experienced over 15% growth, while active customers rose to 20.9 million, a 4.5% increase. Notably, the net sales per active customer (NSPAC) reached $591, up 4.6% year-over-year. Chewy's profitability also strengthened, with a gross margin of 30.4% and adjusted EBITDA of $183.3 million, equating to a 5.9% margin. The company generated nearly $106 million in free cash flow and spent $125 million on share repurchases. Singh also discussed strategic initiatives like the expanding Chewy Vet Care network and the Chewy+ membership program, which contributed to 3% of total sales in July. Looking ahead, Chewy expects to maintain its growth trajectory with a focus on further increasing market share and enhancing customer experiences.

Chewy Financial Statement Overview

Summary

Chewy shows positive growth trends with improving revenue and cash flow metrics. While profitability margins are modest, the company is managing its leverage better and generating strong cash flows. Continued focus on improving profitability and maintaining financial stability will be crucial for sustained growth.

Income Statement

Positive

Chewy has demonstrated consistent revenue growth, with a TTM revenue growth rate of 2.03%. The gross profit margin has improved slightly over time, reaching 29.45% in the TTM period. However, the net profit margin remains low at 1.22%, indicating limited profitability. The EBIT and EBITDA margins are modest, reflecting operational challenges but showing improvement over previous periods.

Balance Sheet

Positive

The company's debt-to-equity ratio has improved to 1.27 in the TTM period, indicating better leverage management compared to previous years. However, the return on equity has decreased significantly to 48.34%, suggesting reduced efficiency in generating profits from shareholders' equity. The equity ratio remains low, highlighting potential financial risk.

Cash Flow

Positive

Chewy's cash flow position is strong, with a free cash flow growth rate of 3.21% in the TTM period. The operating cash flow to net income ratio is healthy at 0.28, indicating good cash generation relative to net income. The free cash flow to net income ratio of 0.76 suggests efficient conversion of profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	12.35B	11.86B	11.15B	10.12B	8.97B	7.15B
Gross Profit	3.64B	3.47B	3.16B	2.83B	2.39B	1.82B
EBITDA	266.48M	271.77M	161.50M	138.56M	-17.72M	-54.80M
Net Income	151.12M	392.74M	39.58M	49.90M	-75.21M	-92.49M
Balance Sheet
Total Assets	3.12B	3.01B	3.19B	2.52B	2.09B	1.74B
Cash, Cash Equivalents and Short-Term Investments	591.80M	596.66M	1.13B	678.59M	603.08M	563.35M
Total Debt	494.10M	535.92M	527.79M	471.82M	410.17M	328.23M
Total Liabilities	2.73B	2.75B	2.68B	2.36B	2.07B	1.74B
Stockholders Equity	389.90M	261.46M	510.24M	160.27M	14.74M	-2.00M
Cash Flow
Free Cash Flow	462.97M	452.49M	342.93M	119.28M	8.55M	2.01M
Operating Cash Flow	611.28M	596.33M	486.21M	349.57M	191.74M	132.75M
Investing Cash Flow	-153.51M	394.57M	-287.36M	-615.48M	-193.27M	-123.69M
Financing Cash Flow	-560.68M	-996.74M	71.60M	-6.73M	41.26M	342.20M

Chewy Technical Analysis

Technical Analysis Sentiment

Negative

Last Price36.02

Price Trends

50DMA

38.60

Negative

100DMA

40.06

Negative

200DMA

37.47

Negative

Market Momentum

MACD

0.02

Positive

RSI

38.85

Neutral

STOCH

30.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHWY, the sentiment is Negative. The current price of 36.02 is below the 20-day moving average (MA) of 40.19, below the 50-day MA of 38.60, and below the 200-day MA of 37.47, indicating a bearish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 38.85 is Neutral, neither overbought nor oversold. The STOCH value of 30.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHWY.

Chewy Risk Analysis

Chewy disclosed 51 risk factors in its most recent earnings report. Chewy reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Chewy Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CART	72 Outperform	$12.38B	27.13	14.54%	―	10.47%	―
BBY	70 Outperform	$16.10B	21.11	26.72%	4.82%	-2.21%	-37.30%
CHWY	68 Neutral	$14.94B	101.64	34.48%	―	9.04%	-56.79%
GPC	67 Neutral	$19.86B	24.03	17.50%	2.86%	2.65%	-32.91%
BBWI	63 Neutral	$5.81B	8.37	-52.83%	2.87%	-0.18%	-18.95%
Sector *	61 Neutral	$18.09B	12.97	-1.60%	2.98%	1.42%	-15.92%
WOOF	56 Neutral	$1.03B	―	-2.48%	―	-2.83%	97.94%

* Consumer Cyclical Sector Average

Performance Comparison

CHWY

Chewy

36.02

4.04

12.63%

BBY

Best Buy Co

78.46

-15.50

-16.50%

GPC

Genuine Parts Company

142.77

9.72

7.31%

BBWI

Bath & Body Works

27.87

1.35

5.09%

WOOF

Petco Health and Wellness Company

3.68

-0.90

-19.65%

CART

Maplebear

45.93

8.94

24.17%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Sep 11, 2025