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 Viewpoint - Amazon is expanding its online pharmacy to include prescription pet medications, enhancing its healthcare offerings and increasing competition in the pet medication market [1][4]. Group 1: Expansion of Services - Amazon has added "hundreds of commonly prescribed pet medications" to its U.S. online pharmacy, including treatments for chronic conditions and flea and tick solutions [1]. - The online pet pharmacy will be managed by Vetsource, ensuring that prescriptions are approved by veterinarians and typically delivered within two to six days [2]. Group 2: Competitive Landscape - The introduction of pet medications positions Amazon in direct competition with Chewy and Walmart, both of which also provide pet prescription delivery services [4]. - Amazon's online pharmacy, launched in 2020, is part of a broader strategy to enhance its healthcare services, which includes the acquisition of One Medical for approximately $3.9 billion in July 2022 [4]. Group 3: Delivery and Logistics - Amazon has been working to improve the speed of prescription shipments, with same-day delivery available in select U.S. cities, and aims to expand this service to nearly half of the U.S. by 2025 [3].