If You're Looking for a Good Reason to Buy Chewy Stock, This Is It

Core Viewpoint - Chewy has shown significant improvements in financial metrics, including sales per customer and profit margins, despite previous declines in customer count. The recent resurgence in customer growth presents a positive outlook for the company [1][6][10]. Financial Performance - In 2024, Chewy achieved net sales of $11.9 billion, with net sales per active customer rising to$578, up from $495 two years prior [2]. - The company's gross margin has improved by over 20$452 million in 2024, reflecting steady growth since 2021 [4]. Shareholder Actions - In 2024, Chewy initiated stock buybacks, spending over $900 million to enhance shareholder value [5]. Customer Growth - Chewy's active customer count peaked at 20.7 million at the end of 2021 but had been declining until a turnaround began in Q3 2024, with an addition of over 400,000 new customers in Q4 compared to the previous year [7][9]. - The potential for customer growth remains substantial, given that approximately 90 million U.S. households own pets, positioning Chewy as the leading e-commerce platform in this sector [7][10]. Valuation and Investment Outlook - Chewy maintains a strong balance sheet with no debt and nearly$600 million in cash and short-term investments [11]. - The stock trades at a reasonable valuation of 1 times sales, suggesting a compelling entry point if growth and profit margins continue to improve [12]. - The combination of improving financial metrics and a return to customer growth makes Chewy stock an attractive investment opportunity [13].