Is This Once-Popular Growth Stock Finally Worth a Second Look in 2026?

Core Viewpoint - Chewy's stock has significantly declined over the past five years, dropping more than 80% from its peak in early 2021, but there are signs that the company's long-term strategy is beginning to pay off, making it a potentially attractive investment opportunity [1][2]. Group 1: Company Overview - Chewy is an online retailer specializing in pet food, toys, treats, and medicine, operating solely as an e-commerce platform without any physical retail presence [2]. - The company competes with Amazon in the online pet supply market, holding approximately one-third market share, similar to Amazon's share [3]. Group 2: Financial Performance - In the fiscal third quarter, Chewy reported revenue of $3.1 billion, reflecting an 8.3% year-over-year increase, continuing a consistent growth trend [3]. - A significant portion of Chewy's revenue, 83.9%, came from subscription-based recurring shipments, up from 80% in the same quarter the previous year, indicating a growing customer base willing to spend nearly $600 annually [5][6]. Group 3: Profitability and Growth Potential - Chewy has transitioned from a loss-making position to profitability at a faster rate than its revenue growth, suggesting a sustainable shift towards positive earnings [4]. - The company's ability to retain customers through subscription services is expected to drive continued bottom-line growth, as it is more cost-effective to maintain existing customers than to acquire new ones [6].