Core Viewpoint - Chewy (CHWY) is currently trading at $24.23 per share, making it an attractive option for long-term investors despite recent stock performance challenges [1][4]. Financial Performance - Chewy's stock has seen a decline, with average annual returns of -35.31% over the past year, 18.64% over the past three years, and 27.19% over the past five years [3]. - The company reported a revenue increase of 8.3% year over year in its third-quarter results, with gross profit margins rising by 0.5 percentage points [8]. Market Position - Chewy has a market capitalization of $10 billion and a current price-to-earnings (P/E) ratio of 24, significantly lower than its five-year average of 73 [5][8]. - The price-to-sales ratio stands at 0.82, also below its five-year average of 1.35, indicating a potentially undervalued stock [8]. Customer Loyalty and Revenue Streams - Chewy's Autoship service has been a significant contributor to its revenue, accounting for 84% of total revenue, showcasing strong customer loyalty [5][8]. - Net sales per active customer have been gradually increasing, indicating a positive trend in customer engagement [8]. Investment Potential - If Chewy continues to grow at 8%, an investment of $12,000 annually could yield substantial returns over time, potentially reaching over $3 million in 40 years [5]. - While Chewy is not expected to be the sole driver of wealth accumulation, it is positioned as a promising growth stock within a diversified portfolio [6].

Group 1 - Chewy Inc (NYSE:CHWY) is considered one of the best large-cap stocks under $100, with a significant upside potential of approximately 49% based on a median 1-year price target of $47.19 [1] - The stock has received coverage from 18 analysts, with 16 assigning Buy ratings and 2 giving Hold calls, indicating a highly bullish sentiment towards the company [1] - Analyst Shweta Khajuria from Wolfe Research reaffirmed an Outperform rating on Chewy, lowering her price target from $46 to $44, which still suggests around 39% upside potential [2] Group 2 - Khajuria's optimism for Chewy is based on a positive outlook for Internet stocks in 2026, although she cautions that the upcoming year may not see the same level of outperformance due to stretched valuations [3] - Chewy operates as an e-commerce retailer focused on pet health products and services, generating 70% of its business revenues through its popular "Autoship" service [4] - The company offers products from over 3,500 brands via a high-volume automated distribution network, highlighting its extensive market reach [4]

Core Viewpoint - Chewy (NYSE: CHWY) presents an attractive investment opportunity due to its current valuation metrics, with a forward-looking P/E ratio of 24, significantly lower than its five-year average of 73, and a price-to-sales ratio of 1.1 compared to its five-year average of 1.4 [1] Group 1: Financial Performance - Chewy has experienced average annual losses of 21% over the past five years, indicating a need for confidence in its growth potential before investing [2] - The company reported an 8.3% year-over-year revenue increase, along with improved net and gross profit margins [7] - Autoship revenue, which constitutes about 84% of total sales, has grown by 5% [7] Group 2: Business Model and Growth Drivers - Chewy operates primarily as an e-commerce business focused on pet products and services, facing competition from major players like Amazon and Walmart, yet it has maintained steady revenue growth [3] - The autoship service allows customers to subscribe to regular deliveries of pet products, providing Chewy with more reliable revenue streams [4] - The company is diversifying its offerings by expanding into pet insurance, veterinary telehealth, and pet prescriptions [4] Group 3: Customer Loyalty and Brand Perception - Chewy has built strong customer loyalty, exemplified by its thoughtful customer service practices, such as sending condolence cards for deceased pets [4] - While the future is not guaranteed, Chewy's prospects appear promising, with expectations for continued growth over time despite recent struggles [5]

Core Insights - Chewy Inc. is a leading online retailer in the pet supplies market, focusing on customer service and a user-friendly platform to differentiate itself from competitors like Amazon and Petco [1] Financial Performance - Chewy reported third-quarter revenue of $3.12 billion, representing an 8.1% year-over-year increase, driven by strong demand and a rise in unit volume [3][6] - The number of active customers grew to 21.2 million, reflecting a nearly 5% year-over-year increase, supported by improved marketing efficiency and higher conversion rates [3][6] Sales Growth - Autoship sales, crucial for predictability and cost efficiency, increased by 13.6% year-over-year to $2.61 billion, indicating strong customer retention [4][6] - The performance of Chewy's mobile app also showed significant growth, with app customers and orders rising by 15% year-over-year due to enhanced functionality and increased direct traffic [4] Market Position and Outlook - Barclays maintained an "Overweight" rating for Chewy, raising its price target from $47 to $52 following the company's impressive earnings report and optimistic guidance for the fourth quarter [2][6] - Despite challenging macroeconomic conditions, Chewy continues to demonstrate resilience and growth, with the stock currently priced at $35.43 and a market capitalization of approximately $14.69 billion [5]

Core Viewpoint - Chewy has demonstrated strong performance with a stock price increase of over 120% in the past year, driven by revenue growth and improved gross margins [1][4]. Revenue Growth - Chewy's revenue for fiscal Q4 2024 reached $3.25 billion, a nearly 15% year-over-year increase, surpassing the company's forecast [4]. - The company experienced a significant improvement in sales growth, with Q4 growth being notably higher than the 3% and 5% growth in previous quarters [4]. - Autoship sales increased by over 21% year-over-year to $2.6 billion, accounting for 80.6% of total revenue [5]. - Net sales per active customer rose by 4% to $578, and Chewy added 400,000 active customers in fiscal 2024 [5]. Gross Margin and Profitability - Gross margin increased by 30 basis points to 28.5%, attributed to a shift towards higher-gross-margin businesses [6]. - Adjusted earnings per share (EPS) jumped 56% to $0.28, while adjusted EBITDA climbed 44% year-over-year to $124.5 million [7]. - Free cash flow was reported at $452.5 million, with the company buying back $942.8 million in stock during the year [7]. Future Guidance - For fiscal Q1, Chewy forecasts revenue growth of 6% to 7%, estimating revenue between $3.06 billion and $3.09 billion [8]. - The company anticipates full-year revenue growth of 6% to 7%, projecting total revenue between $12.3 billion and $12.45 billion [9]. - Chewy's revenue growth for fiscal 2024 was 6.4%, which included a 53rd week; without this, growth would have been around 4.4% [9]. Market Position and Valuation - Chewy is positioned as a defensive stock, benefiting from stable pet ownership and a recession-resistant business model [10][12]. - The stock trades at a forward price-to-earnings (P/E) ratio of approximately 27, which is competitive among recession-resistant retailers [13]. - Chewy has a price/earnings-to-growth (PEG) ratio of 0.7, indicating it may be undervalued compared to its expected earnings growth [13]. Investment Appeal - Despite significant price appreciation, Chewy remains an attractive investment due to its strong growth potential and defensive qualities in an uncertain market [15].