Core Viewpoint - The article emphasizes a fundamentals-based approach to value investing, highlighting the importance of long-term growth and robust balance sheets over low multiple stocks [1]. Group 1: Investment Philosophy - The company seeks to identify firms that provide long-term durability at affordable prices, rather than simply focusing on low multiple stocks [1]. - There is a belief that while investing in successful companies carries risks, the potential for significant growth can outweigh immediate price concerns [1]. Group 2: Market Perspective - The article suggests that revenue growth for Chewy Inc. (CHWY) can accelerate, supporting a buy recommendation made in the previous coverage [1].

Core Insights - The article compares two Internet - Commerce stocks, Maplebear (CART) and Chewy (CHWY), to determine which offers better value for investors [1] Group 1: Zacks Rank and Analyst Outlook - Maplebear has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to Chewy, which has a Zacks Rank of 3 (Hold) [3] - The improving analyst outlook for CART suggests a more positive sentiment among analysts compared to CHWY [3] Group 2: Valuation Metrics - CART has a forward P/E ratio of 18.02, significantly lower than CHWY's forward P/E of 26.72, indicating that CART may be undervalued [5] - The PEG ratio for CART is 1.07, while CHWY's PEG ratio is 1.46, suggesting that CART has a better balance between its price and expected earnings growth [5] - CART's P/B ratio is 3.19, compared to CHWY's P/B of 30.02, further highlighting CART's relative undervaluation [6] Group 3: Value Grades - CART has a Value grade of B, while CHWY has a Value grade of D, indicating that CART is perceived as a better value investment [6] - The combination of Zacks Rank and Style Scores suggests that value investors may prefer CART over CHWY at this time [6]

Group 1: MercadoLibre - MercadoLibre has faced challenges recently, with its stock price significantly below its July peak despite a recent uptick [2] - The company reported a third-quarter revenue of $7.4 billion, reflecting a nearly 40% year-over-year growth, but per-share profits only increased from $7.83 to $8.32 [4] - The strategy of offering free shipping has temporarily impacted profitability but is expected to attract long-term customers [5] - Most of MercadoLibre's revenue is generated from Brazil, Mexico, and Argentina, and recent economic changes in Venezuela may present new opportunities [6] Group 2: Chewy - Chewy operates as an online pet supply store, catering to the 94 million U.S. households with pets [8] - The company has a market cap of $13 billion and is currently down over 30% from its June high [9] - In the last quarter, Chewy's revenue reached $3.1 billion, with 84% coming from customers subscribed to recurring deliveries [11] - Chewy's customer base grew by nearly 1 million year-over-year, totaling over 21.1 million, indicating strong customer retention [12] Group 3: DraftKings - DraftKings is a sports-wagering platform that has seen its stock decline over 30% from its February high and is about 50% below its pandemic peak [13] - The company anticipates reporting revenue of approximately $6 billion for fiscal 2025, a 25% increase from the previous year [16] - The global online sports-betting market is projected to grow at an average annual rate of 12.6% through 2034, with the U.S. being a significant contributor [17] - Recent stock weakness is attributed to increased competition and a reduction in revenue guidance, but DraftKings maintains strong brand recognition and partnerships with major sports entities [19]

Core Viewpoint - The article highlights five top stocks to consider for investment in early 2026, emphasizing their strong earnings potential and growth opportunities in various sectors. Group 1: Amazon - Amazon is positioned as a strong investment due to its leadership in e-commerce and cloud computing, with a market cap of $2.6 trillion and a gross margin of 50.05% [5][3] - The company is leveraging artificial intelligence to enhance its e-commerce efficiency and AWS has an annual revenue run rate exceeding $132 billion [5][3] - The stock is considered a safe bet with a current price of $240.95, reflecting a 3.38% increase [4][3] Group 2: Eli Lilly - Eli Lilly is a leader in the weight loss drug market, particularly with its products tirzepatide (Zepbound and Mounjaro), contributing to significant sales growth [6][8] - The company has a market cap of $1 trillion and a gross margin of 83.03%, with a current stock price of $1,064.04, up 2.16% [7][6] - The weight loss drug market is projected to reach nearly $100 billion by the end of the decade, indicating substantial growth potential for Lilly [9] Group 3: Chewy - Chewy operates in the pet e-commerce space, expanding into veterinary services, which broadens its revenue opportunities [10][12] - The company has achieved profitability and 84% of its sales come from its Autoship service, providing predictable revenue [12][11] - Chewy's current market cap is $13 billion, with a gross margin of 28.58% and a stock price of $32.16, reflecting a slight increase of 0.05% [11][10] Group 4: Apple - Apple has underperformed compared to the S&P 500 but is now focusing on AI features, which may attract investors looking for growth [14][15] - The company has a market cap of $3.9 trillion and a gross margin of 46.91%, with a current stock price of $262.36, down 1.83% [15][14] - Apple's services segment is a significant growth area, consistently reporting record revenues [16] Group 5: Moderna - Moderna is identified as a recovery story, facing challenges due to declining vaccine sales but has a promising pipeline of late-stage candidates [18][19] - The company aims to expand its seasonal vaccine offerings from three to six products by 2028 and is working towards cash breakeven [19][20] - Moderna has a market cap of $14 billion, a gross margin of 38.93%, and a current stock price of $35.66, reflecting a 10.85% increase [19][18]

Core Viewpoint - Viking Global Investors has significantly increased its stake in Chewy Inc, indicating strong conviction in the company's long-term potential despite recent stock struggles [1][2][4]. Group 1: Investment Activity - Viking boosted its stake in Chewy by nearly 147% on December 18, 2025, adding over 8 million shares, bringing total ownership to approximately 13.5 million shares valued at around $437 million [2]. - This position represents just over 1% of Viking's portfolio, highlighting the scale of the investment amid Chewy's recent stock performance [2]. Group 2: Company Performance - Chewy's shares have faced challenges, down double digits over the past year and trading closer to their 52-week lows, which typically raises concerns for many investors [3]. - However, for long-term investors like Viking, this decline may present an entry point due to the perceived disconnect between Chewy's stock price and its core business durability [4]. Group 3: Business Model and Market Sentiment - Chewy's subscription-heavy revenue model and its strong position in pet e-commerce contribute to predictable demand, appealing to funds willing to overlook short-term challenges [5]. - Viking's average buy price is above current levels, suggesting a long-term investment strategy rather than a quick trade, with expectations for stabilization in fundamentals and sentiment improvement [5]. Group 4: Market Confidence - Viking's aggressive accumulation of Chewy shares signals a belief that the downside risk for the stock may be limited at current levels [7]. - This investment narrative positions Chewy as a smart-money accumulation story, emphasizing the importance of patience over short-term market movements [7].

Core Insights - Chewy, the largest online pet retailer in the U.S., went public in June 2019 at $22 per share and reached an all-time high of $118.69 in February 2021, showcasing its market dominance and rapid growth [1][2] Sales and Customer Growth - In fiscal 2020, Chewy's net sales surged by 47%, active customers increased by 43%, and net sales per active customer rose by 3%, largely driven by the pandemic [3] - Growth in active customers and net sales slowed in fiscal 2021 as the pandemic effects waned, with a decline in active customers in fiscal 2022 and 2023 due to rising inflation and increased competition from Amazon [4] - Year-over-year metrics show a decline in active customer growth from 8% in FY 2021 to a projected 5% in 9M 2025, while net sales growth decreased from 24% in FY 2021 to a projected 8% in 9M 2025 [5] Strategic Developments - Despite the slowdown, Chewy has been gaining active customers and increasing net sales per active customer through growth in Autoship subscriptions, private label products, integrated ads, and pet health insurance [6] - In Q3 2025, 83.9% of net sales came from Autoship customers, up from 79.2% in FY 2024, indicating a strong reliance on this subscription model [7] Stock Performance - Chewy's stock has declined over 70% from its all-time high, reflecting a cooling growth trajectory in the post-pandemic market [8]

Core Insights - Chewy, Inc. (CHWY) is progressing towards its long-term adjusted EBITDA margin target of 10%, showing consistent year-over-year profitability improvement, particularly in the third quarter of fiscal 2025 [1][5] Financial Performance - Adjusted EBITDA for Chewy increased by 30% year-over-year to $180.9 million in the fiscal third quarter, with the adjusted EBITDA margin expanding by 100 basis points to 5.8% [2][9] - Chewy's fiscal 2025 adjusted EBITDA margin is expected to be between 5.6% and 5.7%, with initiatives like Chewy Vet Care and Chewy+ membership aimed at enhancing customer engagement and supporting long-term margin growth [3][4] Margin Expansion Strategy - Management indicated that less than 450 basis points of margin expansion is needed to reach the long-term target of 10%, with approximately half of this expected from gross margin improvements and the rest from operating expense efficiencies [4][5] Competitive Landscape - Petco Health & Wellness Company, Inc. (WOOF) reported a 3.1% year-over-year decline in net sales to $1.5 billion, but its adjusted EBITDA rose by $17.3 million to $98.6 million due to effective cost management [6] - BARK, Inc. (BARK) reported revenue of $107 million, a 15.2% year-over-year decline, with an adjusted EBITDA loss of $1.4 million [7] Market Position - Chewy's shares have decreased by 25.2% over the last six months, contrasting with an 8.1% rise in the industry [8] - Chewy trades at a forward price-to-earnings ratio of 21.14, which is lower than the industry average of 24 [11] Earnings Estimates - The Zacks Consensus Estimate indicates year-over-year earnings growth of 22.1% for the current fiscal year and 23.3% for the next fiscal year [13]

Core Insights - Chewy, Inc. (CHWY) reported better-than-expected earnings for its third fiscal quarter, indicating strong financial performance [1] - The company continues to experience significant success in growing its subscription business, which is a key driver of its revenue growth [1] Financial Performance - Chewy's earnings exceeded analyst expectations, showcasing its robust operational efficiency and market positioning [1] Subscription Business Growth - The retailer has made notable advancements in expanding its subscription services, contributing positively to its overall business model [1]

Core Insights - Chewy, Inc. (CHWY) reported better-than-expected earnings for its third fiscal quarter, indicating strong financial performance [1] - The company continues to experience significant success in growing its subscription business, which is a key driver of its revenue growth [1] Financial Performance - Chewy's earnings exceeded analyst expectations, showcasing its robust operational efficiency and market positioning [1] Subscription Business Growth - The retailer has made notable advancements in expanding its subscription services, contributing positively to its overall business model [1]

Key Takeaways CHWY Autoship sales hit $2.61B, up 13.6% and representing 84% of total Q3 net sales.Gross margin expanded 50 bps to 29.8% as Autoship mix and disciplined marketing lifted EBITDA 30%.Chewy drove higher order frequency and Autoship use, with paid members delivering margins in line.Chewy, Inc.’s (CHWY) Autoship program is evolving as a key long-term growth driver, as reflected in its third-quarter fiscal 2025 results, which demonstrate the program's strong performance. Autoship generated $2.61 bi ...