Chewy (CHWY) AI Stock Analysis

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Chewy

(NYSE:CHWY)

Rating:75Outperform

Price Target:

$46.00

▲(10.82%Upside)

Chewy's strong financial performance and positive earnings call are the most significant factors, highlighting growth and profitability. Technical analysis provides a neutral outlook, while a high valuation poses a risk if growth expectations are unmet.

Positive Factors

Customer Growth

Chewy's active customer growth and profitability are increasing, and the recent stock pullback is considered overdone.

Market Share

Chewy is expected to gain market share, with its growth outpacing the broader pet industry.

Negative Factors

Gross Margin

Gross margin contracted slightly year-over-year, and SG&A expenses were higher than expected, leading to some investor disappointment.

Investor Expectations

Despite positive results and guidance, Chewy shares are down 10% due to unfulfilled investor expectations for an official FY’25 guide raise.

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

Market Cap

$17.30B

Dividend YieldN/A

Average Volume (3M)6.57M

Price to Earnings (P/E)46.5

Beta (1Y)1.25

Revenue Growth7.64%

EPS Growth369.79%

CountryUS

Employees18,000

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.05

Shares Outstanding195,511,440

10 Day Avg. Volume8,179,984

30 Day Avg. Volume6,574,898

Financial Highlights & Ratios

PEG Ratio-2.20

Price to Book (P/B)85.39

Price to Sales (P/S)0.00

P/FCF Ratio153.17

Enterprise Value/Market Cap1.06

Enterprise Value/Revenue0.40

Enterprise Value/Gross Profit5.35

Enterprise Value/Ebitda19.87

Forecast

1Y Price Target

$46.24

Price Target Upside11.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering25

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 makes money primarily through the sale of pet food and pet-related products directly to consumers via its online platform. The company's revenue model is based on a direct-to-consumer approach, with key revenue streams including the sales of pet food, treats, supplies, and healthcare products. Chewy offers an auto-ship subscription service that provides recurring revenue and enhances customer retention by allowing customers to schedule regular deliveries of their chosen products. Additionally, Chewy has established partnerships with numerous pet product brands and manufacturers to offer a broad selection of items, which contributes to a diverse product range and revenue stability. The company also benefits from its proprietary private label products, which generally have higher margins than third-party products.

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:Mar 26, 2025

(Q1-2025)

% Change Since: 23.50%|

Next Earnings Date:Aug 27, 2025

Earnings Call Sentiment Positive

Chewy's first quarter results show strong sales growth, increased customer engagement, and operational efficiency with notable success in the AutoShip program, sponsored ads, and Chewy Vet Care expansion. However, concerns about one-time item impacts on prior year results, anticipated declines in adjusted EBITDA margin, and potential tariff impacts temper the outlook.

Q1-2025 Updates

Positive Updates

Record First Quarter Net Sales

Q1 net sales exceeded the high end of guidance, growing by over 8% to $3.12 billion, supported by strong participation from new and existing customers.

Significant Growth in AutoShip Program

First quarter AutoShip customer sales reached $2.56 billion, representing approximately 82% of Q1 net sales and a 14.8% increase from the previous year.

Increase in Active Customers

Chewy ended Q1 with 20.8 million active customers, reflecting a 3.8% year-over-year growth and an increase of approximately 240,000 customers sequentially.

Adjusted EBITDA Growth

Chewy generated $192.7 million of adjusted EBITDA, representing a 6.2% adjusted EBITDA margin and a year-over-year increase of approximately 50 basis points.

Chewy Vet Care Expansion

Three new Chewy Vet Care practices were opened, bringing the total to 11 across four states, and plans to open 8 to 10 new clinics in fiscal year 2025.

Successful Sponsored Ads Business

Sponsored ads business grew sequentially, benefiting from the migration to a first-party platform, including the expansion of off-site ads.

Negative Updates

Impact of One-Time Items on Prior Year Comparison

Previous year's gross margin and adjusted EBITDA figures were positively impacted by approximately 70 basis points of one-time items, affecting year-over-year comparisons.

Expected Sequential Declines in Adjusted EBITDA Margin

Despite strong Q1 results, Chewy anticipates modest sequential declines in adjusted EBITDA margin throughout the year due to typical seasonality and timing of investments.

Tariff Concerns

Potential impacts from tariffs on hard goods and discretionary categories were noted, though minimal expected impact is embedded in the 2025 guidance.

Company Guidance

During Chewy, Inc.'s First Quarter 2025 earnings call, a variety of metrics were presented to highlight the company's performance and guidance. Net sales for Q1 2025 increased by over 8% to $3.12 billion, surpassing the high end of guidance. Key drivers included a 12.3% year-over-year growth in hard goods and a record high in auto-ship customer sales, which rose by nearly 15% to $2.56 billion, representing 82% of total net sales. Active customers grew to 20.8 million, marking a 3.8% increase from the previous year. The company achieved a gross margin of 29.6%, with a year-over-year expansion of 60 basis points when adjusted for one-time items from the previous year. Adjusted EBITDA was reported at $192.7 million, reflecting a margin of 6.2% and a 50 basis point increase from the previous year. Looking forward, Chewy maintained its full-year 2025 net sales outlook of $12.3 billion to $12.45 billion, projecting 6% to 7% growth after adjusting for the 53rd week in fiscal 2024. The adjusted EBITDA margin for the full year is anticipated to be between 5.4% and 5.7%, with about 60% of margin expansion driven by improvements in gross margin. The company also expects 80% of adjusted EBITDA to convert into free cash flow for the year, translating to approximately $550 million. Chewy's strategic initiatives, including the Chewy Vet Care expansion and the Chewy Plus membership program, are expected to drive long-term growth and customer loyalty.

Chewy Financial Statement Overview

Summary

Chewy's financial position is strong with impressive revenue growth, a transition to profitability, and enhanced cash flow generation. While the balance sheet shows reduced leverage, the low equity ratio indicates a need for a more robust capital structure.

Income Statement

Very Positive

Chewy has demonstrated impressive revenue growth over the years, with a notable increase from 2020 to 2025. The gross profit margin has improved, reflecting better cost management, and the net profit margin turned positive in recent years, indicating a shift towards profitability. However, EBIT and EBITDA margins are relatively low, suggesting room for operational efficiency improvements.

Balance Sheet

Positive

Chewy's balance sheet shows a manageable level of debt with improvements in stockholders' equity over time. The debt-to-equity ratio has decreased, signaling reduced financial leverage. However, the equity ratio remains relatively low, indicating that assets are still largely financed by liabilities, which poses potential risks if not managed carefully.

Cash Flow

Positive

The company's cash flow generation has strengthened, with significant growth in operating and free cash flows. The free cash flow growth rate is positive, indicating healthy cash reserves for potential reinvestment. The operating cash flow to net income ratio is robust, suggesting strong cash flow relative to profitability. However, fluctuations in financing cash flow highlight potential volatility.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
11.86B	11.15B	10.10B	8.89B	7.15B
	Gross Profit
3.47B	3.16B	2.83B	2.37B	1.82B
	EBIT
112.59M	-23.63M	55.75M	-72.18M	-90.46M
	EBITDA
268.21M	161.50M	138.56M	-17.72M	-54.80M
	Net Income Common Stockholders
392.74M	39.58M	49.90M	-75.46M	-94.51M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
596.66M	1.13B	677.38M	603.08M	563.35M
	Total Assets
3.01B	3.19B	2.52B	2.09B	1.74B
	Total Debt
502.40M	527.79M	471.76M	410.17M	328.23M
	Net Debt
-93.36M	-74.44M	141.32M	-192.91M	-235.11M
	Total Liabilities
2.75B	2.68B	2.30B	2.07B	1.74B
	Stockholders Equity
261.46M	510.24M	213.96M	14.74M	-2.00M
Cash Flow		Free Cash Flow
452.49M	342.93M	119.28M	8.55M	2.01M
	Operating Cash Flow
596.33M	486.21M	349.57M	191.74M	132.75M
	Investing Cash Flow
394.57M	-287.36M	-615.48M	-193.27M	-123.69M
	Financing Cash Flow
-996.74M	71.60M	-6.73M	41.27M	342.20M

Chewy Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price41.51

Price Trends

50DMA

39.91

Positive

100DMA

37.69

Positive

200DMA

34.59

Positive

Market Momentum

MACD

0.50

Positive

RSI

44.17

Neutral

STOCH

22.06

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHWY, the sentiment is Neutral. The current price of 41.51 is below the 20-day moving average (MA) of 44.56, above the 50-day MA of 39.91, and above the 200-day MA of 34.59, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 44.17 is Neutral, neither overbought nor oversold. The STOCH value of 22.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHWY.

Chewy Risk Analysis

Chewy disclosed 50 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CHWY	75 Outperform	$17.30B	46.49	76.24%	―	7.64%	369.79%
CART	73 Outperform	$11.44B	28.81	12.96%	―	11.34%	―
ETSY	68 Neutral	$5.62B	38.74	-39.97%	―	2.18%	-32.87%
TDUP	67 Neutral	$912.87M	―	-69.51%	―	-10.55%	9.27%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%
WOOF	46 Neutral	$711.42M	―	-5.90%	―	-2.37%	95.07%
W	44 Neutral	$6.21B	―	17.86%	―	-0.89%	46.62%

* Consumer Cyclical Sector Average

Performance Comparison

CHWY

Chewy

41.51

16.01

62.78%

Wayfair

48.29

-4.01

-7.67%

ETSY

Etsy

54.53

-3.67

-6.31%

WOOF

Petco Health and Wellness Company

2.40

-1.24

-34.07%

TDUP

thredUP

8.01

6.36

385.45%

CART

Maplebear

43.55

10.47

31.65%

Chewy Corporate Events

Executive/Board ChangesBusiness Operations and Strategy

Chewy CFO Resignation Announced Amid Strategic Growth

Neutral

May 12, 2025

On May 7, 2025, Chewy, Inc. announced the resignation of its Chief Financial Officer, David Reeder, who is leaving to become a CEO in the semiconductor industry. The company confirmed that his departure was not due to any disagreements and reaffirmed its first quarter fiscal 2025 guidance, indicating continued business momentum and strategic growth initiatives. Reeder will remain in his role until June to ensure a smooth transition, as Chewy searches for his successor.

The most recent analyst rating on (CHWY) stock is a Hold with a $22.00 price target. To see the full list of analyst forecasts on Chewy stock, see the CHWY Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy

Chewy Expands Board with New Director Appointment

Positive

Apr 25, 2025

On April 24, 2025, Chewy, Inc. expanded its board of directors from thirteen to fourteen members by appointing Dr. Nat Goldhaber as a Class I director, with his term set to expire at the company’s annual meeting of stockholders in 2026. Dr. Goldhaber, an independent director under SEC and NYSE rules, brings extensive experience in venture capital, clean energy, and healthcare investments, having co-founded Claremont Creek Ventures. His appointment is expected to enhance Chewy’s strategic direction, leveraging his expertise in technology and energy sectors.

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.