Core Insights - The article discusses the investment positions of Parkev Tatevosian, CFA, and The Motley Fool, highlighting their recommendations for Chewy and Salesforce [1] Company Analysis - The Motley Fool has positions in and recommends Chewy and Salesforce, indicating a positive outlook on these companies [1] - Parkev Tatevosian is affiliated with The Motley Fool and may receive compensation for promoting its services, which could influence his opinions [1]

Core Viewpoint - JPMorgan analyst Doug Anmuth maintains an Overweight rating on Chewy, Inc. with a price target of $36, anticipating positive financial results for Q1 FY25 and an upward revision of FY25 outlook [1][2] Financial Performance Expectations - Chewy is expected to report Q1 net sales guidance between $3.06 billion and $3.09 billion, with a full-year net sales outlook of $12.30 billion to $12.45 billion [1] - Adjusted EBITDA margins are projected to be between 5.4% and 5.7% for FY25, with a year-over-year increase of 59 basis points [5] Revenue Growth and Customer Dynamics - Anmuth forecasts net customer additions of 104,000 sequentially in Q1 FY25 and 421,000 year-over-year for the full year [3] - Over 80% of Chewy's sales come from Autoship customers, providing strong revenue visibility and unit economics [3] Profitability and Revenue Diversification - Chewy's profitability is supported by advertising, product mix, automation, scale, and cost control, with projected free cash flow of $524 million, reflecting a 16% year-over-year increase [5] - The company is diversifying revenue through high-margin segments such as pharmacy, which has reached $1 billion on a trailing twelve-month basis, and international expansion [2] Market Trends and Traffic Insights - Chewy's web traffic increased by 4% year-over-year in Q1, with signs of improvement noted in May, although this is a decrease from 13% growth in the previous quarter [4] - Anmuth estimates a 6% year-over-year net sales growth for Q1 and 3% for FY25, which he considers conservative [4]

Company Overview - Proactive is a financial news publisher that provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2] - The company has a team of experienced and qualified news journalists who produce independent content [2] Market Focus - Proactive specializes in medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [3] - The news team delivers insights across various sectors including biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto, and emerging digital and EV technologies [3] Technology Adoption - Proactive is recognized for its forward-looking approach and enthusiastic adoption of technology to enhance workflows [4] - The company utilizes automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]

Core Viewpoint - Chewy Inc's stock has experienced a downgrade from "buy" to "hold" by Jefferies, despite an increase in the price target from $41 to $43, primarily due to valuation concerns [1] Group 1: Stock Performance - Chewy's stock is down 2.8% in pre-market trading [1] - The stock has increased by 113% over the last 12 months and 41.2% year-to-date [1] - The stock reached a two-year high of $47.55 on June 3 [1] - The 10-day moving average has served as a reliable support level during recent pullbacks [1] Group 2: Analyst Sentiment - A majority of analysts remain positive, with 20 out of 28 covering firms maintaining a "buy" or better rating [2] - There is potential for sentiment to shift if momentum fades [2] - Short interest has decreased by 17.2% in the last two weeks, with 7.8% of the float sold short, which could support future gains [2] Group 3: Options Market - Options are currently pricing in relatively low volatility, with Chewy's Schaeffer's Volatility Index (SVI) at 65%, placing it in the 29th percentile of its annual range [2] - This suggests that options premiums are affordable [2]

Company Overview - Chewy (NYSE:CHWY) is a prominent player in the pet e-commerce sector, offering food and supplies for various pets, and is expanding into personalized products, pet insurance, and telehealth services, with a market capitalization of $19 billion [3]. Financial Performance - Chewy is expected to report revenues of approximately $3.08 billion for the upcoming quarter, reflecting a year-over-year increase of about 7%, with anticipated earnings of around $0.34 per share [3]. - Over the past twelve months, Chewy generated total revenues of $12 billion, achieving operational profitability with $113 million in operating profits and a net income of $393 million [3]. Market Trends - The growth in Chewy's revenue is attributed to an expanding customer base and increased adoption of the Autoship subscription service, which allows customers to schedule regular deliveries of pet supplies [3]. Earnings Reaction Analysis - Historical data indicates that Chewy has recorded 18 earnings data points over the last five years, with 5 positive and 13 negative one-day (1D) returns, resulting in a positive return occurrence of approximately 28% [5]. - The percentage of positive returns increases to 36% when considering the last three years, with a median of 11% for positive returns and -8.1% for negative returns [5]. Investment Alternatives - For investors seeking reduced volatility compared to individual stocks, the Trefis High Quality portfolio has outperformed the S&P 500, achieving returns exceeding 91% since its inception [3][6].

The latest trading session saw Chewy (CHWY) ending at $47.62, denoting a +0.34% adjustment from its last day's close. The stock's change was less than the S&P 500's daily gain of 0.58%. Elsewhere, the Dow gained 0.51%, while the tech-heavy Nasdaq added 0.81%.The online pet store's stock has climbed by 25.52% in the past month, exceeding the Retail-Wholesale sector's gain of 3.83% and the S&P 500's gain of 4.61%.The upcoming earnings release of Chewy will be of great interest to investors. The company's earn ...

Core Viewpoint - The current market cycle has shifted towards value stocks, with Chewy Inc. positioned favorably due to its stable business model and customer base that remains resilient regardless of economic conditions [3][5][6]. Group 1: Market Cycle and Investment Sentiment - The market cycle is currently at an extreme, with rising bond yields and interest rates leading investors to seek safer value stocks [3][4]. - Chewy Inc. is highlighted as a potential investment due to its focus on stability and predictability in a volatile market [3][5]. Group 2: Institutional Investment and Stock Performance - BC Partners has initiated a significant position in Chewy, acquiring a stake worth up to $7.1 billion, representing 53.1% ownership [6]. - The short interest in Chewy stock has decreased by 17.2% over the past month, indicating potential bullish sentiment and institutional interest [7][8]. Group 3: Analyst Ratings and Price Forecast - Chewy's current price is $47.44, with a 12-month price forecast averaging $40.18, indicating a potential downside of 15.31% [10]. - Analyst Trevor Young from Barclays has reiterated an Overweight rating for Chewy, setting a price target of $50, suggesting an upside potential of 10.6% from the current price [10][11]. Group 4: Valuation Metrics - Chewy's P/E ratio is approximately 49.7, significantly higher than the retail sector average of 24.6, reflecting a premium valuation [12]. - The market often values companies like Chewy at a premium due to their perceived ability to outperform peers and the broader market [13].

Company Performance - Chewy's stock closed at $44.12, reflecting a +1.87% change from the previous day, outperforming the S&P 500's loss of 0.39% [1] - The stock has increased by 27.83% over the past month, surpassing the Retail-Wholesale sector's gain of 12.4% and the S&P 500's gain of 13.07% [1] Upcoming Earnings - Chewy is set to release its earnings report on June 11, 2025, with an expected EPS of $0.34, representing a 9.68% increase from the same quarter last year [2] - The Zacks Consensus Estimate projects net sales of $3.07 billion, up 6.85% from the previous year [2] Annual Estimates - For the annual period, the Zacks Consensus Estimates predict earnings of $1.23 per share and revenue of $12.4 billion, indicating increases of +18.27% and +4.52% respectively from the last year [3] Analyst Estimates - Recent changes to analyst estimates for Chewy are important as they reflect short-term business trends, with positive revisions indicating a favorable outlook on the company's health and profitability [4] Zacks Rank - Chewy currently holds a Zacks Rank of 3 (Hold), with the Zacks Consensus EPS estimate remaining steady over the past month [6] - The Zacks Rank system has a strong track record, with stocks rated 1 delivering an average annual return of +25% since 1988 [6] Valuation Metrics - Chewy's Forward P/E ratio is 35.18, indicating a premium compared to its industry's Forward P/E of 25.12 [7] - The company has a PEG ratio of 3.72, while the Internet-Commerce industry average PEG ratio is 1.44 [7] Industry Context - The Internet-Commerce industry, part of the Retail-Wholesale sector, has a Zacks Industry Rank of 50, placing it in the top 21% of all industries [8] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Insights - Chewy, Inc. is the largest pure-play online pet retailer in the U.S., boasting over 20 million active customers and estimated net sales of more than $1.2 billion in fiscal 2025 [1] - The company generates over 80% of its revenue from subscription-based auto ship customers, with approximately 85% of revenue coming from non-discretionary categories [1] - Chewy's profitability is on the rise, with expectations of nearly 5.5% adjusted EBITDA margins and around $525 million in free cash flow for the current year [2] Management Changes - David Reeder, the CFO of Chewy, announced his departure to return to the semiconductor industry as a CEO after just over a year in the role [4] - Reeder has a background in the semiconductor industry, having started his career as a chemical engineer over thirty years ago [4] - Despite his departure, Reeder highlighted Chewy's continued growth in active customers and net sales, as well as the high predictability of revenue from subscriptions [4]

Chewy (CHWY) FY Conference Summary Company Overview - Chewy is the largest pure play online pet retailer in the U.S. with over 20 million active customers and estimated net sales of over $1.2 billion in fiscal 2025 [1][2] - More than 80% of revenue is generated from subscription-based auto-ship customers, and about 85% comes from nondiscretionary categories [2][12] Key Financial Metrics - Expected adjusted EBITDA margins of approximately 5.5% and free cash flow of about $525 million for the year [3][2] - Chewy's profitability continues to improve, with a focus on building out its pet ecosystem [5][6] Leadership Changes - CFO David Reeder announced his departure to return to the semiconductor industry after just over a year at Chewy [5][6] Industry Insights - The U.S. pet industry is valued at approximately $150 billion, with about 30% of that market occurring online [10][11] - Chewy is positioned to benefit as more spending shifts online, particularly in pharmacy and health and wellness categories [11][12] Customer Growth and Retention - Active customer growth is expected to be low single digits in fiscal 2025, driven by Chewy's efforts rather than overall market growth [19][30] - Chewy has improved gross adds, reactivations, and reduced churn through targeted marketing and personalized offerings [20][22] Market Resilience - The pet industry is described as recession resilient, with consumables being a predictable revenue source [12][13] - Chewy's business model, with 85% of revenue from consumables, provides stability during economic downturns [13][12] Product Categories and Growth Strategies - Hard goods sales are more sensitive to macroeconomic conditions but have shown signs of recovery [32][33] - The health and wellness category, which accounts for about 30% of sales, has higher gross margins and is expected to grow significantly [40][41] Veterinary Services Expansion - Chewy has opened eight veterinary clinics and plans to add another eight to ten, which are attracting both existing and new customers [44][46] - More than half of new customers visiting the clinics subsequently place orders on Chewy's platform [46] Profitability and Cost Management - Chewy expects to expand adjusted EBITDA margins by 60 to 90 basis points, with a focus on gross margin improvement and operational efficiency [55][56] - Automation in fulfillment centers is expected to increase productivity by about 30% per square foot [64][65] Capital Allocation - Chewy returned approximately $950 million to shareholders last year and continues to generate significant free cash flow [70][68] - The company maintains a flexible capital allocation strategy, including opportunistic share repurchases [70][68] Conclusion - Chewy is well-positioned in the growing online pet retail market, with a strong focus on customer retention, product diversification, and operational efficiency. The company is leveraging its unique position in the pet ecosystem to drive future growth and profitability.