Chewy (CHWY) AI Stock Analysis

• Market Cap: $13.31B
• Dividend Yield: N/A
• Average Volume (3M): 7.67M
• Price to Earnings (P/E): 66.2
• Beta (1Y): 0.79
• Revenue Growth: 9.80%
• EPS Growth: -46.84%
• Country: US
• Employees: 18,000
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.14
• Shares Outstanding: 238,520,320
• 10 Day Avg. Volume: 6,785,257
• 30 Day Avg. Volume: 7,674,437
• PEG Ratio: 0.05
• Price to Book (P/B): 61.46
• Price to Sales (P/S): 1.35
• P/FCF Ratio: 35.52
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 1.07
• Enterprise Value/Gross Profit: 3.62
• Enterprise Value/Ebitda: 39.86
• 1Y Price Target: $47.19
• Price Target Upside: 47.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18
• EPS Forecast (FY): 0.52
• Revenue Forecast (FY): $12.60B

• Rating: 61 Neutral
• Price Target: $35.00 ▲(9.14% Upside)

The score is driven primarily by improving financial performance—especially strong free cash flow and better gross margins—supported by a constructive earnings update and raised profitability outlook. These positives are tempered by weak longer-term technical positioning (below the 100/200-day averages with negative MACD) and a rich valuation (P/E ~69) with no dividend yield.

Positive Factors

Free Cash Flow Strength

Sustained operating cash flow (~$636M TTM) and strong free cash flow (~$487M TTM) give Chewy durable internal funding for reinvestment, M&A, and buybacks. This improves financial flexibility, reduces financing reliance, and supports strategic initiatives over the next several quarters.

Improving Gross Margins

Gross margin expansion to roughly 29.6% reflects better unit economics from pricing, mix and operational execution. Higher gross margins are a structural tailwind that increase resilience to cost inflation and create room to invest in growth or customer experience without immediate margin erosion.

Recurring Revenue via Autoship/Chewy+

Rapid Autoship growth and a 21.2M active customer base indicate high retention and subscription-driven predictability. Chewy+ and Autoship raise lifetime value, smooth demand, and lower per-order acquisition costs, strengthening revenue durability and monetization over the medium term.

Negative Factors

Thin Net Profitability

Net margins remain very thin (~1.6% TTM), leaving limited buffer for cost shocks or cyclical revenue dips. Low bottom-line profitability constrains retained earnings, limits reinvestment capacity, and heightens sensitivity to rising costs or slower sales momentum in the coming quarters.

Elevated SG&A and Margin Cyclicality

High SG&A (18.9% of sales) and guidance for sequential margin weakness due to promotions and higher media rates indicate persistent cost pressure. Structural reliance on marketing/promotions risks eroding sustainable margins unless revenue growth consistently outpaces these expenses.

Modest Equity Cushion / Leverage Sensitivity

A debt-to-equity around 1.11 combined with a relatively small and volatile equity base amplifies leverage volatility. That sensitivity lowers resilience to prolonged stress, limits large strategic moves without external funding, and increases refinancing risk if cash flows deteriorate.

Chewy Business Overview & Revenue Model

Company Description

Chewy, 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 Money

Chewy generates revenue primarily through the sale of pet food and supplies via its online platform. The company's key revenue streams include direct product sales, subscription services through autoship, and various promotional partnerships with pet brands and manufacturers. Autoship subscriptions provide a predictable revenue stream, as customers can set up recurring orders for their pet essentials, often at discounted prices. Additionally, Chewy has established partnerships with leading pet product manufacturers, enabling it to offer exclusive products and promotions, which further enhance its sales. The company also invests in customer engagement strategies, such as personalized recommendations and loyalty programs, to increase repeat purchases and drive overall revenue growth.

Chewy Financial Statement Overview

Summary

Solid cash generation (Cash Flow score 80) and improving gross margin support the profile, but profitability remains thin (TTM net margin 1.22%) and balance-sheet risk is elevated (Balance Sheet score 65; low equity ratio despite improved leverage).

Income Statement

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

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

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	12.58B	11.86B	11.15B	10.12B	8.97B	7.15B
Gross Profit	3.72B	3.47B	3.16B	2.83B	2.39B	1.82B
EBITDA	338.25M	271.77M	161.50M	138.56M	-17.72M	-54.80M
Net Income	206.39M	392.74M	39.58M	49.90M	-75.21M	-92.49M
Balance Sheet
Total Assets	3.29B	3.01B	3.19B	2.52B	2.09B	1.74B
Cash, Cash Equivalents and Short-Term Investments	701.50M	596.66M	1.13B	678.59M	603.08M	563.35M
Total Debt	523.00M	502.40M	527.79M	471.82M	410.17M	328.23M
Total Liabilities	2.83B	2.75B	2.68B	2.36B	2.07B	1.74B
Stockholders Equity	469.40M	261.46M	510.24M	160.27M	14.74M	-2.00M
Cash Flow
Free Cash Flow	487.00M	452.49M	342.93M	119.28M	8.55M	2.01M
Operating Cash Flow	635.72M	596.33M	486.21M	349.57M	191.74M	132.75M
Investing Cash Flow	-178.81M	394.57M	-287.36M	-615.48M	-193.27M	-123.69M
Financing Cash Flow	-288.00M	-996.74M	71.60M	-6.73M	41.26M	342.20M

Chewy Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 32.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: 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 32.07 is below the 20-day moving average (MA) of 32.59, below the 50-day MA of 33.28, and below the 200-day MA of 37.43, indicating a bearish trend. The MACD of -0.27 indicates Negative momentum. The RSI at 44.84 is Neutral, neither overbought nor oversold. The STOCH value of 67.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHWY.

Chewy Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CART	79 Outperform	$10.73B	22.44	15.33%	―	10.16%	18.29%
GPC	69 Neutral	$18.61B	23.05	17.05%	3.33%	3.26%	-25.41%
BBY	62 Neutral	$13.97B	22.01	22.49%	5.46%	-0.95%	-48.28%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
CHWY	61 Neutral	$13.31B	66.22	59.58%	―	9.80%	-46.84%
BBWI	53 Neutral	$4.71B	7.08	―	4.16%	-1.04%	-20.88%
WOOF	52 Neutral	$824.05M	-271.30	-0.19%	―	-3.85%	97.87%