Chewy (CHWY - Free Report) ended the recent trading session at $20.86, demonstrating a +1.96% change from the preceding day's closing price. The stock's change was more than the S&P 500's daily gain of 0.05%. At the same time, the Dow added 0.46%, and the tech-heavy Nasdaq lost 0.64%.
Coming into today, shares of the online pet store had gained 12.79% in the past month. In that same time, the Retail-Wholesale sector lost 0.78%, while the S&P 500 gained 0.61%.
The investment community will be paying close attention to the earnings performance of Chewy in its upcoming release. The company is forecasted to report an EPS of $0.36, showcasing a 9.09% upward movement from the corresponding quarter of the prior year. In the meantime, our current consensus estimate forecasts the revenue to be $3.32 billion, indicating a 6.83% growth compared to the corresponding quarter of the prior year.
CHWY's full-year Zacks Consensus Estimates are calling for earnings of $1.53 per share and revenue of $13.49 billion. These results would represent year-over-year changes of +20.47% and +7.06%, respectively.
Investors should also take note of any recent adjustments to analyst estimates for Chewy. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.78% lower. Chewy is currently sporting a Zacks Rank of #5 (Strong Sell).
In terms of valuation, Chewy is currently trading at a Forward P/E ratio of 13.39. This indicates a discount in contrast to its industry's Forward P/E of 16.54.
It is also worth noting that CHWY currently has a PEG ratio of 0.54. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Internet - Commerce industry had an average PEG ratio of 1.11 as trading concluded yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 157, this industry ranks in the bottom 37% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.
Chewy (CHWY - Free Report) closed the most recent trading day at $20.46, moving -4.93% from the previous trading session. This move lagged the S&P 500's daily loss of 1.21%. At the same time, the Dow lost 0.97%, and the tech-heavy Nasdaq lost 2.15%.
Shares of the online pet store have appreciated by 13.2% over the course of the past month, outperforming the Retail-Wholesale sector's gain of 2.27%, and the S&P 500's gain of 0.42%.
The investment community will be paying close attention to the earnings performance of Chewy in its upcoming release. The company is expected to report EPS of $0.36, up 9.09% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $3.32 billion, indicating a 6.83% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates project earnings of $1.53 per share and a revenue of $13.49 billion, demonstrating changes of +20.47% and +7.06%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Chewy. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.78% downward. Chewy currently has a Zacks Rank of #5 (Strong Sell).
Looking at its valuation, Chewy is holding a Forward P/E ratio of 14.09. This expresses a discount compared to the average Forward P/E of 16.93 of its industry.
We can additionally observe that CHWY currently boasts a PEG ratio of 0.57. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CHWY's industry had an average PEG ratio of 1.11 as of yesterday's close.
The Internet - Commerce industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 158, positioning it in the bottom 36% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow CHWY in the coming trading sessions, be sure to utilize Zacks.com.
Chewy (CHWY -3.39%) was a stock market darling during the pandemic. The online pet supply retailer boomed as locked-down consumers sought safe ways to shop for their pets.
As the necessity for social distancing waned, investors turned on the retail stock. However, Chewy's revenue never stopped growing even as customers returned to in-person shopping. The stock fell to a multiyear low in June 2026. However, the rebound that began late last month is likely to continue.
Image source: Getty Images.
The state of Chewy Chewy stock is up 23% since bottoming late in June. However, it is still at the lower end of the range in which it has traded since settling down after the pandemic. Today, it trades at an 82% discount from its all-time high.
Now, it appears that most investors have not reconsidered the stock's value proposition. Chewy's revenue growth never stopped, and it has evolved from merely a retailer into a more comprehensive pet care company.
Besides its Chewy+ loyalty program and the ease of automatic purchases through autoship, it began to expand internationally by serving parts of Canada. Furthermore, it offers online telehealth services for pets, and has opened numerous vet clinics.
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In its fiscal 2026 first quarter, which ended May 3, its net sales rose by almost 8% from year-ago levels to $3.36 billion. That was slightly higher than its 6% increase during fiscal 2025.
Moreover, the company turned profitable after fiscal 2022 and has reported positive earnings in every year since. In fiscal Q1, its net income surged by 52% to $95 million. Although net income fell in 2025, it would have increased rapidly if not for a $241 million one-time income tax benefit in 2024 that impacted the comparison.
This means investors can now buy into a more solid company whose stock trades at a fraction of its valuation during the pandemic. For now, it sells at a price-to-earnings ratio (P/E) of 36, which is a bit of a premium compared to the S&P 500's average earnings multiple of 25.5. But its forward P/E of 14 indicates that it's inexpensive based on where the company's bottom line is expected to go in the near future.
Chewy as a rebounding stock The company's continued business expansion and net sales growth amid a falling P/E ratio position the stock for a rebound. Investors may have lost interest in this e-commerce specialist after the pandemic. Nonetheless, it has evolved from just a retailer into more of a pet care company in that time.
Also, the huge surge in profits bodes well for prospective shareholders considering its low forward earnings multiple. Knowing this, investors may want to add the stock to their portfolios now before more people take notice of this increasingly attractive buying opportunity.
Bank of New York Mellon Corp reduced its stake in Chewy (NYSE:CHWY – Free Report) by 1.9% during the 1st quarter, according to its most recent filing with the Securities and Exchange Commission. The fund owned 4,252,907 shares of the company’s stock after selling 83,722 shares during the quarter. Bank of New York Mellon Corp owned 1.02% of Chewy worth $114,828,000 at the end of the most recent reporting period.
A number of other institutional investors have also modified their holdings of the stock. Wellington Management Group LLP increased its position in Chewy by 295.9% during the 3rd quarter. Wellington Management Group LLP now owns 17,622,768 shares of the company’s stock worth $712,841,000 after purchasing an additional 13,171,325 shares during the period. Viking Global Investors LP lifted its holdings in Chewy by 146.9% in the fourth quarter. Viking Global Investors LP now owns 13,536,645 shares of the company’s stock valued at $447,386,000 after acquiring an additional 8,052,955 shares during the period. AQR Capital Management LLC boosted its position in shares of Chewy by 120.2% during the 3rd quarter. AQR Capital Management LLC now owns 10,196,146 shares of the company’s stock worth $407,948,000 after purchasing an additional 5,564,803 shares in the last quarter. Norges Bank purchased a new stake in shares of Chewy during the 4th quarter worth $154,647,000. Finally, State Street Corp grew its stake in shares of Chewy by 75.5% during the 2nd quarter. State Street Corp now owns 6,170,197 shares of the company’s stock worth $262,974,000 after purchasing an additional 2,654,496 shares during the period. Institutional investors and hedge funds own 93.09% of the company’s stock.
Chewy Stock Up 5.0% CHWY stock opened at $21.98 on Tuesday. The stock has a market capitalization of $9.00 billion, a price-to-earnings ratio of 36.64, a price-to-earnings-growth ratio of 1.06 and a beta of 1.45. Chewy has a 52-week low of $17.40 and a 52-week high of $43.50. The stock’s fifty day simple moving average is $20.34 and its 200-day simple moving average is $24.94.
Insiders Place Their Bets In other news, CEO Sumit Singh sold 83,306 shares of Chewy stock in a transaction dated Monday, May 4th. The stock was sold at an average price of $25.60, for a total value of $2,132,633.60. Following the transaction, the chief executive officer directly owned 874,061 shares of the company’s stock, valued at $22,375,961.60. The trade was a 8.70% decrease in their position. The transaction was disclosed in a document filed with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, General Counsel Da-Wai Hu sold 4,203 shares of the business’s stock in a transaction dated Monday, June 29th. The stock was sold at an average price of $19.49, for a total value of $81,916.47. Following the sale, the general counsel owned 4,103 shares of the company’s stock, valued at $79,967.47. The trade was a 50.60% decrease in their position. The SEC filing for this sale provides additional information. In the last quarter, insiders sold 91,729 shares of company stock worth $2,322,582. 0.34% of the stock is owned by company insiders.
Analyst Upgrades and Downgrades A number of research analysts have issued reports on CHWY shares. Zacks Research cut shares of Chewy from a “hold” rating to a “strong sell” rating in a report on Thursday, June 25th. TD Cowen restated a “buy” rating on shares of Chewy in a report on Tuesday, June 23rd. Mizuho dropped their price objective on Chewy from $50.00 to $40.00 and set an “outperform” rating for the company in a research note on Wednesday, June 3rd. The Goldman Sachs Group decreased their target price on Chewy from $46.00 to $34.00 and set a “buy” rating on the stock in a research report on Friday, June 12th. Finally, JPMorgan Chase & Co. lowered their target price on Chewy from $35.00 to $29.00 and set an “overweight” rating on the stock in a report on Thursday, June 11th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, five have issued a Hold rating and one has issued a Sell rating to the company. According to MarketBeat, the company has an average rating of “Moderate Buy” and an average price target of $32.05.
View Our Latest Stock Analysis on CHWY
Chewy Profile (Free Report)
Chewy, Inc (NYSE: CHWY) is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.
Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.
Further Reading Five stocks we like better than Chewy The Ugliest Stocks in the Market Just Got a Very Expensive Vote of Confidence Is Domino’s Stock Serving Up a Buying Opportunity? A $1T Black Hole: SpaceX Eyes Pentagon AI to Break Free Why Gold Miners Could Be the Market’s Biggest Comeback Story Want to see what other hedge funds are holding CHWY? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Chewy (NYSE:CHWY – Free Report).
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Allspring Global Investments Holdings LLC reduced its stake in shares of Chewy (NYSE:CHWY – Free Report) by 22.0% in the 1st quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The fund owned 901,118 shares of the company’s stock after selling 254,811 shares during the period. Allspring Global Investments Holdings LLC owned 0.22% of Chewy worth $23,988,000 at the end of the most recent quarter.
Several other hedge funds and other institutional investors have also recently bought and sold shares of CHWY. CoreCap Advisors LLC raised its position in shares of Chewy by 306.2% during the fourth quarter. CoreCap Advisors LLC now owns 845 shares of the company’s stock worth $28,000 after acquiring an additional 637 shares during the last quarter. Harbour Investments Inc. boosted its holdings in Chewy by 81.4% in the fourth quarter. Harbour Investments Inc. now owns 907 shares of the company’s stock valued at $30,000 after acquiring an additional 407 shares during the last quarter. Osterweis Capital Management Inc. bought a new stake in Chewy in the second quarter valued at approximately $30,000. Los Angeles Capital Management LLC acquired a new stake in Chewy during the 4th quarter valued at approximately $31,000. Finally, Modus Advisors LLC acquired a new stake in Chewy during the 4th quarter valued at approximately $34,000. 93.09% of the stock is owned by institutional investors and hedge funds.
Chewy Trading Up 5.0% NYSE:CHWY opened at $21.98 on Tuesday. Chewy has a 12 month low of $17.40 and a 12 month high of $43.50. The stock has a market capitalization of $9.00 billion, a price-to-earnings ratio of 36.64, a PEG ratio of 1.06 and a beta of 1.45. The firm has a fifty day simple moving average of $20.34 and a two-hundred day simple moving average of $24.94.
Insider Transactions at Chewy In related news, CEO Sumit Singh sold 83,306 shares of the company’s stock in a transaction that occurred on Monday, May 4th. The stock was sold at an average price of $25.60, for a total transaction of $2,132,633.60. Following the transaction, the chief executive officer directly owned 874,061 shares of the company’s stock, valued at approximately $22,375,961.60. This represents a 8.70% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, General Counsel Da-Wai Hu sold 4,203 shares of the stock in a transaction that occurred on Monday, June 29th. The stock was sold at an average price of $19.49, for a total value of $81,916.47. Following the completion of the transaction, the general counsel owned 4,103 shares in the company, valued at approximately $79,967.47. The trade was a 50.60% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. Insiders have sold a total of 91,729 shares of company stock worth $2,322,582 in the last three months. Insiders own 0.34% of the company’s stock.
Analyst Ratings Changes A number of brokerages have recently issued reports on CHWY. Needham & Company LLC restated a “hold” rating on shares of Chewy in a research report on Thursday, June 11th. Wedbush decreased their price objective on shares of Chewy from $42.00 to $36.00 and set an “outperform” rating for the company in a research report on Thursday, March 26th. Guggenheim reissued a “buy” rating and set a $45.00 target price on shares of Chewy in a research note on Monday, April 27th. Citizens Jmp dropped their target price on shares of Chewy from $45.00 to $28.00 and set a “market outperform” rating on the stock in a report on Thursday, June 11th. Finally, Argus raised shares of Chewy to a “strong-buy” rating in a research report on Tuesday, April 7th. One investment analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating, five have assigned a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus price target of $32.05.
View Our Latest Analysis on Chewy
Chewy Company Profile (Free Report)
Chewy, Inc (NYSE: CHWY) is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.
Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.
Further Reading Five stocks we like better than Chewy The Ugliest Stocks in the Market Just Got a Very Expensive Vote of Confidence Is Domino’s Stock Serving Up a Buying Opportunity? A $1T Black Hole: SpaceX Eyes Pentagon AI to Break Free Why Gold Miners Could Be the Market’s Biggest Comeback Story Want to see what other hedge funds are holding CHWY? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Chewy (NYSE:CHWY – Free Report).
Receive News & Ratings for Chewy Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Chewy and related companies with MarketBeat.com's FREE daily email newsletter.
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In the latest trading session, Chewy (CHWY - Free Report) closed at $21.53, marking a +1.51% move from the previous day. This move outpaced the S&P 500's daily loss of 0.51%. On the other hand, the Dow registered a loss of 0.2%, and the technology-centric Nasdaq decreased by 1.47%.
The stock of online pet store has risen by 19.36% in the past month, leading the Retail-Wholesale sector's gain of 0.51% and the S&P 500's gain of 0.53%.
The upcoming earnings release of Chewy will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.36, reflecting a 9.09% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $3.32 billion, indicating a 6.83% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.53 per share and revenue of $13.49 billion, indicating changes of +20.47% and +7.06%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Chewy. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.31% lower within the past month. Currently, Chewy is carrying a Zacks Rank of #5 (Strong Sell).
With respect to valuation, Chewy is currently being traded at a Forward P/E ratio of 13.88. For comparison, its industry has an average Forward P/E of 17.09, which means Chewy is trading at a discount to the group.
It is also worth noting that CHWY currently has a PEG ratio of 0.56. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 1.09.
The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 170, this industry ranks in the bottom 31% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
Chewy (CHWY - Free Report) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Over the past month, shares of this online pet store have returned +19.4%, compared to the Zacks S&P 500 composite's +0.5% change. During this period, the Zacks Internet - Commerce industry, which Chewy falls in, has gained 4.7%. The key question now is: What could be the stock's future direction?
Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Chewy is expected to post earnings of $0.36 per share for the current quarter, representing a year-over-year change of +9.1%. Over the last 30 days, the Zacks Consensus Estimate has changed -4.1%.
The consensus earnings estimate of $1.53 for the current fiscal year indicates a year-over-year change of +20.5%. This estimate has changed -0.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $1.86 indicates a change of +21.7% from what Chewy is expected to report a year ago. Over the past month, the estimate has changed -0.5%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Chewy is rated Zacks Rank #5 (Strong Sell).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
In the case of Chewy, the consensus sales estimate of $3.32 billion for the current quarter points to a year-over-year change of +6.8%. The $13.49 billion and $14.47 billion estimates for the current and next fiscal years indicate changes of +7.1% and +7.2%, respectively.
Last Reported Results and Surprise HistoryChewy reported revenues of $3.36 billion in the last reported quarter, representing a year-over-year change of +7.7%. EPS of $0.43 for the same period compares with $0.35 a year ago.
Compared to the Zacks Consensus Estimate of $3.35 billion, the reported revenues represent a surprise of +0.15%. The EPS surprise was 0%.
Over the last four quarters, the company surpassed EPS estimates just once. The company topped consensus revenue estimates each time over this period.
ValuationNo investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Chewy is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Chewy. However, its Zacks Rank #5 does suggest that it may underperform the broader market in the near term.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about Chewy (CHWY - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Chewy currently has an average brokerage recommendation (ABR) of 1.67, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 27 brokerage firms. An ABR of 1.67 approximates between Strong Buy and Buy.
Of the 27 recommendations that derive the current ABR, 18 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 66.7% and 7.4% of all recommendations.
Brokerage Recommendation Trends for CHWY
Check price target & stock forecast for Chewy here>>>
While the ABR calls for buying Chewy, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRAlthough both Zacks Rank and ABR are displayed in a range of 1--5, they are different measures altogether.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CHWY a Good Investment?Looking at the earnings estimate revisions for Chewy, the Zacks Consensus Estimate for the current year has declined 0.3% over the past month to $1.53.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Chewy. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Chewy with a grain of salt.
Key Takeaways Chewy sees pet healthcare as a major growth opportunity, supported by its Vet Care clinic network.CHWY's Vet Care clinics attract new customers and increase spending from existing customers.CHWY expects Modern Animal to accelerate clinic expansion to about 60 locations by fiscal 2026. Chewy, Inc. (CHWY - Free Report) believes pet healthcare remains one of its largest long-term growth opportunities, supported by an estimated total addressable market of around $54 billion. Chewy Vet Care clinics continue to generate strong stand-alone economics while serving as effective customer acquisition and retention channels for the broader ecosystem. The shortage of veterinarians also provides Chewy with a structural advantage as it expands its veterinary clinic network.
To support this strategy, the company completed the acquisition of Modern Animal. Management noted that Modern Animal adds a complementary clinic footprint, strong clinical expertise and a technology-enabled operating model aligned with Chewy Vet Care. The acquisition is expected to accelerate clinic expansion by combining Chewy Vet Care’s organic growth with Modern Animal’s existing footprint and development pipeline, with the combined business projected to operate approximately 60 clinics by the end of fiscal 2026 and generate an embedded steady-state revenue contribution of about $290 million.
The company noted that Chewy Vet Care continues to strengthen the broader Chewy ecosystem by attracting new customers to the platform while encouraging existing customers to increase their spending following their initial clinic visit. This demonstrates the strategic value of its integrated pet healthcare offering by supporting customer acquisition, retention and a greater share of wallet, while reinforcing the company's long-term growth strategy.
Additionally, technology-enabled workflows and AI-assisted tools are driving strong veterinary productivity, retention and employee satisfaction. Combined with Chewy’s recurring revenue model, scaled fulfillment network and expanding healthcare platform, these capabilities support its long-term 10% adjusted EBITDA margin target. Overall, Chewy's expanding healthcare ecosystem strengthens its competitive moat by enhancing customer acquisition, retention and share of wallet while supporting long-term profitability.
Zacks Rundown for CHWYCHWY shares have lost 25.3% in the past three months compared with the industry’s 2.6% decline. The company carries a Zacks Rank #5 (Strong Sell) at present.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a forward price-to-earnings ratio of 21.74, lower than the industry’s average of 21.84.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings for the current and next fiscal year indicates year-over-year growth of 20.5% and 21.7%, respectively.
Image Source: Zacks Investment Research
Stocks to ConsiderSome better-ranked stocks have been discussed below:
Phibro Animal Health Corporation (PAHC - Free Report) operates as an animal health and mineral nutrition company in the United States, Latin America and Canada, Europe, the Middle East, Africa, and the Asia Pacific. PAHC currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for PAHC's current fiscal-year sales and earnings implies growth of 14.8% and 47.4%, respectively, from the year-ago actuals. PAHC delivered a trailing four-quarter earnings surprise of 16.3%, on average.
Carvana Co. (CVNA - Free Report) , currently carrying a Zacks Rank #2, operates an e-commerce platform for buying and selling used cars.
The Zacks Consensus Estimate for CVNA’s current financial-year sales implies growth of 38.5%, and the same for earnings implies a decline of 6.5% from the year-ago reported numbers. CVNA delivered a negative trailing four-quarter earnings surprise of 71.6%, on average.
Amazon.com Inc. (AMZN - Free Report) engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores in North America and internationally. At present, Amazon carries a Zacks Rank of 2.
The consensus estimate for Amazon’s current fiscal-year sales and earnings implies growth of 15.2% and 29.6%, respectively, from the year-ago figures. AMZN delivered a trailing four-quarter earnings surprise of 11.4%, on average.
Chewy remains a Strong Buy, with valuation implying a high margin of safety even under conservative assumptions and challenging macro conditions. Q1 delivered 7.7% YoY net sales growth, $71M FCF, record profitability, and nearly 200,000 net customer additions despite consumer headwinds. CHWY's guidance reflects macro pressure: net sales are expected at $13.40–$13.55B and Adj. EBITDA margin at 6.6–6.8%, but long-term potential remains intact.
SummaryChewy is upgraded from Hold to Buy after a 40% stock decline and earnings multiple compression.CHWY’s fundamentals have improved, with consistent top and bottom-line growth despite occasional estimate misses.The pet products market remains high-growth, supporting sustained demand and CHWY’s upward business trajectory.High short interest could create short-term selling pressure, but short covering may fuel upside potential. Alina Ziabrieva/iStock via Getty Images
The last time I wrote a piece on Chewy, Inc. (CHWY) was back in December. I thought that its upside was muted because of a fairly-valued stock. And that was exactly what happened. Chewy has
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Chewy’s Growth Engine Is Stronger Than the Market ThinksChewy NYSE: CHWY held its 2026 Annual Meeting of Stockholders, with Chairman of the Board Raymond Svider presiding over the virtual meeting and announcing preliminary voting results on four proposals.
Svider said the meeting was “duly and lawfully convened” after confirming that notice of the meeting and proxy materials had been distributed to stockholders of record as of May 13, 2026, and that a quorum was present. He noted that Broadridge Financial Services delivered an affidavit of distribution and that American Election Services served as inspector of elections.
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From CrowdStrike to Chewy, These Tanking Stocks Are Announcing BuybacksMembers of Chewy’s board and management team participated in the meeting, including Chief Executive Officer Sumit Singh, Chief Financial Officer Chris Deppe and General Counsel and Secretary Da-Wai Hu. David Chalich of Deloitte & Touche, Chewy’s independent registered public accounting firm, was also present and available to answer questions during the question-and-answer portion.
Stockholders Vote on Director Nominees The first proposal before stockholders was the election of five Class I directors to serve three-year terms until the company’s 2029 annual meeting of stockholders, or until their successors are duly nominated and qualified.
Chewy Gobbles up Market Share in 2026: Poised to Advance in Q2The nominees were:
Raymond Svider Marco Castelli Nat Goldhaber James Nelson Martin H. Nesbitt Based on preliminary results announced during the meeting, Svider said each of the director nominees was elected.
Deloitte Ratified as Independent Auditor Stockholders also voted on the ratification of Deloitte & Touche LLP as Chewy’s independent registered public accounting firm for the current fiscal year.
Svider said the audit committee selected Deloitte & Touche to audit the consolidated financial statements of Chewy and its subsidiaries for the fiscal year ending Jan. 31, 2027. According to the preliminary results, the proposal was approved.
Executive Compensation Measures Approved The third proposal was a non-binding advisory vote to approve the compensation of Chewy’s named executive officers, as described in the company’s proxy statement. The materials included the compensation discussion and analysis section, related compensation tables and narrative discussion.
Svider said the proposal was approved based on preliminary voting results.
The fourth proposal was an advisory vote on how often stockholders should vote on named executive officer compensation in the future. Svider said an annual frequency received the most votes from stockholders.
Final Results to Be Filed With SEC Svider said final voting results will be included in a Form 8-K to be filed with the Securities and Exchange Commission within four business days of the meeting.
The company did not address any stockholder questions during the formal meeting. Svider said there were “no questions relevant to the business at hand” before adjourning the meeting.
At the start of the meeting, Svider also reminded participants that remarks about future expectations, plans or prospects may constitute forward-looking statements under federal securities law. He said those statements are subject to risks and uncertainties described in Chewy’s annual report on Form 10-K for fiscal 2025 and other SEC filings.
About Chewy NYSE: CHWYChewy, Inc NYSE: CHWY is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.
Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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Chewy remains a "Buy" despite a ~40% YTD decline and a guidance cut, as I view challenges as cyclical, not structural. CHWY lowered FY26 sales outlook to $13.40–$13.55 billion, citing macro headwinds and consumer trade-down to lower-priced pet products. I see ongoing improvements in margins, customer net additions, and engagement, supporting long-term growth and share gains.
It has been about a month since the last earnings report for Chewy (CHWY - Free Report) . Shares have added about 10.1% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Chewy due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Chewy before we dive into how investors and analysts have reacted as of late.
Chewy Q1 Earnings Meet Estimates, Sales Beat on Autoship StrengthChewy reported solid first-quarter fiscal 2026 results, wherein the top line beat the Zacks Consensus Estimate, and the bottom line met the same. Both metrics showed year-over-year growth.
Chewy noted that while the overall pet category remains resilient, the consumer environment has become more challenging since the company established its initial fiscal 2026 outlook. In response to these evolving conditions, management is updating its full-year sales outlook to reflect softer consumer trends and more conservative internal assumptions.
CHWY’s Quarterly Performance: Key Metrics and InsightsChewy posted adjusted earnings of 43 cents per share, which came in line with the Zacks Consensus Estimate. The figure increased from 35 cents in the prior-year period.
The company reported net sales of $3,357.2 million, surpassing the Zacks Consensus Estimate of $3,352 million. The figure increased 7.7% from $3,116 million posted in the year-ago period.
The Autoship subscription program remained a cornerstone of Chewy’s model. Autoship customer sales grew 10.5% year over year to $2,832.6 million from $2,562.7 million, outpacing overall net sales growth. The metric represented 84.4% of total net sales.
The company ended the quarter with 21.5 million active customers, increasing 3.6% year over year.
Chewy’s net sales per active customer reached $597. The metric reflects a 2.4% year-over-year increase from $583.
CHWY’s Margin & Cost PerformanceChewy’s gross profit increased 3.6% year over year to $1,011.4 million from $923.8 million. The gross margin expanded by 50 basis points (bps) year over year to 30.1%, driven primarily by continued growth in sponsored ads, favorable category mix and operating discipline.
Adjusted SG&A expenses reached $593 million in the fiscal first quarter. As a percentage of net sales, this metric declined 90 basis points year over year to 17.7%, due to lower variable costs from productivity improvements and AI-led efficiencies.
Advertising and marketing expenses for the fiscal first quarter were $206.1 million compared with $193.8 million in the prior-year period. As a percentage of sales, advertising and marketing expenses were 6.1%.
The adjusted EBITDA increased 31.3% year over year to $253.1 million from $192.7 million. The adjusted EBITDA margin increased 130 bps year over year to 7.5% from 6.2%, driven by adjusted EBITDA flow-through of greater than 25%. This level of profitability expansion reflects the structural strengthening of Chewy's earnings model.
CHWY’s Financial Health SnapshotCHWY ended the quarter with approximately $485.2 million in cash, cash equivalents and $34.9 million in marketable securities. Total shareholders’ equity stood at $424.2 million.
The company generated net cash provided by operating activities of $108.5 million and free cash flow of $70.8 million for the quarter, up 45.4% from the prior-year period. Capital expenditures were $37.7 million, consistent with ongoing investment needs across the network.
Capital allocation remained active. The company repurchased $200 million of common stock during the quarter, reflecting continued emphasis on returning cash to shareholders alongside strategic investments.
What to Expect From CHWY in the Future?Chewy revised its full-year fiscal 2026 net sales outlook, with expectations between $13.4 billion and $13.55 billion compared with the previous guidance range of $13.6 billion to $13.75 billion. The updated outlook includes expected net sales contributions of approximately $80 million from SmartPak and approximately $70 million from Modern Animal during fiscal 2026.
Adjusted EBITDA margin is expected to be in the range of 6.6-6.8%, roughly a 100 bps year-over-year increase at the midpoint. This outlook reflects a more conservative view of consumer spending patterns and category growth assumptions. Management emphasized that the change was tied to slower expected net sales per active customer expansion, driven by weaker discretionary attachment and premiumization.
For the second quarter of fiscal 2026, the company expects net sales in the range of $3.3-$3.33 billion, reflecting 6-7% year-over-year growth. The outlook assumes a generally stable operating environment and consumer trends compared with the end of the first quarter. The company continues to see healthy customer engagement, strength in Autoship and ongoing market share gains. However, near-term pressure remains on discretionary attachment and premiumization behavior. Management is also introducing quarterly adjusted EBITDA margin guidance to provide greater transparency amid varying profitability drivers.
Chewy expects second-quarter adjusted EBITDA margin to be between 6.3% and 6.4%, representing approximately 50 basis points of year-over-year expansion at the midpoint. Profitability is expected to face pressure from tougher gross margin comparisons due to prior-year non-recurring MAP pricing benefits and elevated fuel surcharge costs. However, ongoing SG&A discipline and operational efficiency improvements are expected to support margin performance during the quarter.
How Have Estimates Been Moving Since Then?Since the earnings release, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -18.29% due to these changes.
VGM ScoresCurrently, Chewy has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Chewy has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry PlayerChewy is part of the Zacks Internet - Commerce industry. Over the past month, PetMed (PETS - Free Report) , a stock from the same industry, has gained 6.5%. The company reported its results for the quarter ended March 2026 more than a month ago.
PetMed reported revenues of $42.82 million in the last reported quarter, representing a year-over-year change of -7.9%. EPS of -$0.19 for the same period compares with -$0.56 a year ago.
PetMed is expected to post earnings of $0.12 per share for the current quarter, representing a year-over-year change of +135.3%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for PetMed. Also, the stock has a VGM Score of B.
Key Takeaways Chewy's recurring revenues are supported by customer growth and higher spending per active customer.CHWY's Vet Care clinics attract new customers and help increase spending from existing customers.CHWY's Autoship ecosystem and value proposition continue to support loyalty and market share gains. Chewy, Inc. (CHWY - Free Report) highlighted the continued strength of its recurring revenue base, supported by a balanced contribution from both active customer growth and the Net Sales Per Active Customer (NSPAC) expansion. Management believes that the pet category remains resilient, supported by recurring non-discretionary spending and strong emotional attachment between pet owners and their pets. Despite a more challenging operating environment, the company continues to gain market share steadily within the category.
The company views Chewy Health and Chewy Vet Care to be among its most significant long-term growth opportunities. Chewy Vet Care clinics continue to deliver strong stand-alone economics while supporting customer acquisition and retention across the broader Chewy ecosystem. Around 40% of clinic customers are new to Chewy and generate approximately $900 in first-year NSPAC. In addition, existing Chewy customers who visit Chewy Vet Care increase their share of wallet at a meaningfully faster rate after their initial clinic visit.
Chewy’s value proposition continues to differentiate it through industry-leading convenience, competitive pricing, trusted service, a broad product assortment and its recurring Autoship ecosystem. Management noted that these strengths become even more relevant during periods when consumers prioritize value, reliability and trusted relationships. The company believes this combination reinforces customer loyalty, supports sustained demand and strengthens its competitive positioning within the pet category.
Overall, Chewy’s integrated ecosystem continues to strengthen its competitive position by deepening customer relationships and increasing customer lifetime value. Consistent execution of this strategy should support durable market share gains and sustainable long-term profitable growth.
Zacks Rundown for CHWYCHWY shares have lost 32.3% in the past six months compared with the industry’s 7.6% decline. The company carries a Zacks Rank #5 (Strong Sell) at present.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a forward price-to-earnings ratio of 22.77, higher than the industry’s average of 21.38.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings for the current and next fiscal year indicates year-over-year growth of 20.5% and 21.7%, respectively.
Image Source: Zacks Investment Research
Stocks to ConsiderSome better-ranked stocks have been discussed below:
Central Garden & Pet Company (CENT - Free Report) produces and distributes various products for the lawn and garden, and pet supplies markets in the United States. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CENT’s current financial-year sales implies a decline of 5.7%, and the same for earnings implies growth of 5.9% from the year-ago reported numbers. CENT delivered a trailing four-quarter earnings surprise of 45.4%, on average.
Phibro Animal Health Corporation (PAHC - Free Report) operates as an animal health and mineral nutrition company in the United States, Latin America and Canada, Europe, the Middle East, Africa, and the Asia Pacific. PAHC presently carries a Zacks Rank of 2 (Buy).
The Zacks Consensus Estimate for PAHC's current fiscal-year sales and earnings implies growth of 14.8% and 47.4%, respectively, from the year-ago actuals. PAHC delivered a trailing four-quarter earnings surprise of 16.3%, on average.
Trupanion, Inc. (TRUP - Free Report) together with its subsidiaries, provides medical insurance for cats and dogs on a subscription basis in the United States, Canada, Continental Europe, and Australia. It currently holds a Zacks Rank #2.
The Zacks Consensus Estimate for TRUP’s current financial-year sales and earnings indicates 9.4% and 20% growth from the last year, respectively. TRUP reported a trailing four-quarter average earnings surprise of 250%.
On CNBC’s “Mad Money Lightning Round,” Jim Cramer said he likes Nextpower Inc. (NASDAQ:NXT) and its CEO.
“I think I’ve lost the right to be able to say anything about that, because that’s Shugar’s company, Dan Shugar [CEO & founder of Nextpower], and we made money on it, but you know what, we left it way too soon,” Cramer said. “That man is a miracle worker.”
According to recent news, Nextpower announced on June 22 a definitive agreement to acquire Zimmermann PV-Steel Group, a Germany-based solar technology provider.
‘It’s Down, It Bounces, It Goes Back Down’Chewy, Inc. (NYSE:CHWY) is “too hard to own,” Cramer said. “It’s down so much, but I have to tell you, every time I say it goes down too much, and then it bounces, it goes right back down.”
On the earnings front, Chewy, on June 10, reported first-quarter results that topped Wall Street expectations on both earnings and revenue, but the online pet retailer lowered its fiscal 2026 sales outlook, citing a more cautious consumer spending environment.
On July 2, Butterfly Network announced the commercial availability of its handheld ultrasound devices in Brazil through a network of authorized distribution partners.
“You have a winner there,” Cramer said. “I think it can continue to go higher, barring communities saying no more data centers,” he added.
Preformed Line Products reported first-quarter earnings of $2.14 per share on April 29, beating the analyst consensus estimate of $1.82 per share. The company reported quarterly sales of $176.278 million which missed the analyst consensus estimate of $178.000 million.
Price Action Chewy shares gained 2.1% to settle at $21.29 on Monday. Butterfly Network shares gained 7.2% to close at $8.23. Nextpower shares rose 1.9% to settle at $115.03 on Monday. Preformed Line Products shares fell 0.3% to close at $367.78. Photo via Shutterstock
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Key Takeaways Chewy is scaling AI across customer service, pharmacy, fulfillment and marketing workflows.CHWY expects AI initiatives to deliver efficiency gains in the low tens of millions of dollars in fiscal 2026.Chewy reported 90 basis points of year-over-year SG&A leverage, aided by productivity and early AI benefits. Chewy, Inc. (CHWY - Free Report) is expanding the use of artificial intelligence ("AI") and automation across its business to enhance customer service and improve operational efficiency. During the first quarter of fiscal 2026, the company built the infrastructure required to deploy AI at scale and began integrating these capabilities across multiple functions to support its long-term growth strategy.
Chewy is applying AI and automation across customer service, pharmacy operations, fulfillment and marketing workflows. Management noted that these initiatives are helping lower the cost of serving customers by improving workflow speed, service quality and productivity. The company is utilizing AI to enhance search relevance, personalization and marketing effectiveness.
Chewy expects AI-driven initiatives to generate efficiency benefits in the low tens of millions of dollars during fiscal 2026, with a more meaningful contribution anticipated in 2027 and beyond. In the first quarter, the company delivered roughly 90 basis points of year-over-year SG&A leverage, supported by fulfillment productivity gains, operating discipline and early benefits from technology, automation and AI-enabled initiatives.
At the same time, Chewy continues to invest in strategic growth initiatives, including expanding Chewy Health, scaling Chewy Vet Care, optimizing its fulfillment network and strengthening customer acquisition capabilities. Management emphasized that investments in AI infrastructure and automation are designed not only to improve near-term productivity but also to reinforce the company's long-term competitive positioning.
Looking ahead, management believes continued investments across health, AI, automation, fulfillment and customer experience will strengthen the Chewy ecosystem. The company reiterated the long-term adjusted EBITDA margin target of 10%, reflecting confidence in the operating model as it balances innovation, automation and disciplined execution.
CHWY’s Price Performance, Valuation & EstimatesChewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 28% over the past three months against the industry’s growth of 5.5%. Meanwhile, BARK's shares have declined 5.4% and Petco has dipped 1%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.63X, below the industry’s average of 2.10X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.21) and Petco (0.13).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 and 2027 earnings implies year-over-year growth of 20.5% and 21.9%, respectively. Estimates for fiscal 2026 and 2027 have been revised downward by 9 cents and 13 cents, respectively, over the past 30 days.
Image Source: Zacks Investment Research
Although the company continues to invest in AI, healthcare and fulfillment capabilities to support long-term growth, short-term challenges remain. Management expects margin expansion to moderate amid difficult comparisons, higher transportation-related costs and continued strategic investments. A softer consumer spending environment and a more cautious outlook for discretionary categories could limit revenue growth and operating leverage in the near term. CHWY currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
When deciding whether to buy, sell, or hold a stock, investors often rely on analyst recommendations. Media reports about rating changes by these brokerage-firm-employed (or sell-side) analysts often influence a stock's price, but are they really important?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Chewy (CHWY - Free Report) .
Chewy currently has an average brokerage recommendation (ABR) of 1.67, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 27 brokerage firms. An ABR of 1.67 approximates between Strong Buy and Buy.
Of the 27 recommendations that derive the current ABR, 18 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 66.7% and 7.4% of all recommendations.
Brokerage Recommendation Trends for CHWY
Check price target & stock forecast for Chewy here>>>
While the ABR calls for buying Chewy, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
Zacks Rank Should Not Be Confused With ABRIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is CHWY a Good Investment?In terms of earnings estimate revisions for Chewy, the Zacks Consensus Estimate for the current year has declined 9.3% over the past month to $1.53.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #5 (Strong Sell) for Chewy. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Chewy with a grain of salt.
Chewy's (CHWY +2.12%) management team lowered its 2026 growth expectations.
*Stock prices used were the afternoon prices of June 24, 2026. The video was published on June 26, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
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On June 25, 2026, Chewy Inc (CHWY) shares fell 4.6% to $18.14, continuing a downward trend that has seen the stock lose 45.1% year-to-date and 57.5% over the pa
Chewy shares are climbing with conviction. Why is CHWY stock up today? Goldman Sachs Trims Price Target But Keeps Buy RatingGoldman Sachs analyst Alexandra Steiger reaffirmed a Buy rating on Chewy while reducing her price target to $34 from $46. The update landed during a volatile session for the broader market, with strength concentrated in Consumer Discretionary at +1.59% while Technology lags with a -1.54% decline.
Critical Levels To Watch for CHWY StockEven with Wednesday’s rebound, the longer-term trend remains under pressure. Chewy trades 5% below its 20-day simple moving average at $19.92, 15.7% below its 50-day simple moving average at $22.45, and 35.9% below its 200-day simple moving average at $29.53. When multiple moving averages sit overhead like this, they often act as stacked layers of resistance until price can reclaim them and hold.
Momentum also leans cautious. MACD remains below its signal line and the histogram is negative, which shows that upward pressure has cooled compared with the prior upswing. MACD compares faster and slower trend signals, and when it sits under the signal line it often means buyers need stronger follow through to keep a rebound alive.
The broader trend structure also reflects significant damage. The 20-day average is below the 50-day average, and the 50-day average is below the 200-day average, a death cross that formed in November 2025. With the stock down 56.34% over the past year and trading only slightly above the $17.40 52-week low, rallies still look counter-trend until the chart begins forming higher highs and higher lows again.
Key Resistance: $19.92 — This level matches the 20-day simple moving average and represents the nearest overhead trend line that price has yet to reclaim. Key Support: $17.40 — This zone aligns with the 52-week low and serves as the most important downside reference for traders watching for stabilization. Chewy’s Benzinga Edge Scorecard Breakdown Momentum: Bearish (Score: 2.48) — The broader trend remains weak despite today’s bounce. Value: Weak (Score: 12.21) — The stock does not screen as inexpensive on this model, which can limit support if growth expectations soften. Growth: Strong (Score: 96/100) — Chewy scores well on growth factors, which can keep buyers interested during pullbacks. The Verdict: Chewy’s Benzinga Edge profile shows a company with strong growth characteristics but very weak momentum and a low value score. For long term bulls, the setup improves most if the stock can reclaim key moving averages. Until that happens, rallies may remain tactical rather than trend changing.
CHWY Shares Are ClimbingCHWY Price Action: Chewy shares were up 6.78% at $19.06 at the time of publication on Wednesday, according to Benzinga Pro.
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Key Takeaways CHWY acquired Modern Animal to expand its veterinary care platform and healthcare ecosystem.CHWY expects roughly 60 clinics by FY26 through combined expansion plans.Modern Animal is projected to contribute $70M to FY26 revenues for CHWY. Chewy, Inc. (CHWY - Free Report) is accelerating its push into pet healthcare through the acquisition of Modern Animal, a technology-enabled veterinary care provider. The deal strengthens Chewy’s presence in the highly attractive and underpenetrated pet healthcare market while supporting its broader strategy of building a comprehensive ecosystem that spans products, pharmacy and veterinary services. Management believes that the company is well-positioned to capitalize on this opportunity as demand for pet healthcare continues to grow.
A key advantage for Chewy is its growing access to veterinary talent in an industry facing a shortage of veterinarians. Management noted that this creates a structural advantage as the company expands its Chewy Vet Care network. Modern Animal adds a highly complementary platform with strong clinical expertise, above-industry unit economics and an experience-led, technology-enabled model that aligns closely with Chewy’s veterinary strategy.
The acquisition is expected to accelerate clinic expansion by combining Chewy Vet Care’s organic growth initiatives with Modern Animal’s existing footprint and development pipeline. Together, the businesses are expected to operate 60 clinics by the end of fiscal 2026, with embedded revenue contribution approaching $290 million at steady state.
Chewy has also incorporated the acquisition into its fiscal 2026 outlook. The company expects net sales of $13.40-$13.55 billion, indicating year-over-year growth of 6.3-7.5%. The guidance includes an estimated $70-million revenue contribution from Modern Animal during fiscal 2026.
While Modern Animal’s clinics generate attractive mature four-wall profitability, management expects the business to create a modest margin-rate drag during 2026 as integration efforts progress. Even so, Chewy maintained confidence in its earnings model and plans to open 10-12 Chewy Vet Care locations this year while integrating Modern Animal into its operating and technology platforms.
CHWY’s Price Performance, Valuation & EstimatesChewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 22.8% in the past three months against the industry’s growth of 10%. Meanwhile, BARK shares have declined 20.4% and Petco has dipped 9.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.59X, below the industry’s average of 2.20X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.22) and Petco (0.12).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 and 2027 earnings implies year-over-year growth of 20.5% and 22.2%, respectively. Estimates for fiscal 2026 and 2027 have been revised downward by 10 cents and 13 cents, respectively, in the past 30 days.
On June 22, 2026, Chewy Inc CHWY shares experienced a decline of 3.8%, closing at $17.51. The stock has faced significant pressure, trading within a 52-week range of $17.40 to $43.84.
GF Value™ verdict: The current price of $17.51 is 48.0% below the GF Value™ estimate of $33.68.GF Score™ is 68/100, indicating an above-average potential for long-term returns.Most notable signal: Insiders sold $2.2M worth of shares in the last three months, with no buying activity reported. Is CHWY Overvalued or Undervalued? Chewy Inc's current price of $17.51 is significantly lower than its GF Value™ estimate of $33.68, indicating that the stock is undervalued by approximately 48.0%. This presents a margin of safety for potential investors, as the GF Valuation label classifies the stock as significantly undervalued. However, it is essential to consider that despite the apparent value, the recent insider selling could suggest caution. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
The current market environment and the stock's recent performance could reflect broader market sentiment or company-specific challenges. A prudent approach would involve monitoring market trends and the company's operational metrics closely to assess whether this undervaluation presents a genuine opportunity or if it reflects underlying concerns.
How Does CHWY's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 29.2x 115.7x Forward P/E 22.0x N/A Chewy's current P/E ratio of 29.2x is substantially below its 5-year median P/E of 115.7x, indicating that the stock is trading at a significant discount compared to its historical valuation. The forward P/E of 22.0x further emphasizes this point. This P/E analysis aligns with the GF Value™ verdict, suggesting that the stock is undervalued relative to its historical performance.
What Does CHWY's GF Score™ Tell Us? Metric Rating GF Score™ 68 Financial Strength 7/10 Profitability 4/10 Growth 6/10 Valuation 4/10 Momentum 4/10 Chewy's GF Score™ of 68/100 suggests that the company possesses above-average potential for long-term returns. The strongest area is its Financial Strength, rated at 7/10, indicating a solid balance sheet. However, the weakest aspect is Profitability, with a score of 4/10, suggesting that the company may face challenges in generating consistent profits. The Growth and Valuation ranks are also average, while the Momentum rank reflects the recent downward trend in the stock price.
What Are Insiders Doing with CHWY Stock? In the last three months, Chewy insiders have sold $2.2M worth of shares, with no reported buying activity. This pattern of selling could indicate a lack of confidence in the company's short-term performance or a strategic decision by insiders to liquidate their holdings. Such insider selling might suggest caution for potential investors, as it raises questions about the future outlook of the company.
What This Means for Investors Based on the GF Value™ assessment, Chewy Inc CHWY appears to be undervalued at its current price of $17.51. However, the significant insider selling and overall market performance should be taken into account when considering the investment.
For the complete analysis, visit the Chewy Inc CHWY stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is CHWY's GF Score™?
Chewy's GF Score™ is 68/100, indicating that the stock has above-average potential for long-term returns based on key financial metrics.
Is CHWY overvalued or undervalued?
Chewy is currently undervalued, with a GF Value™ estimate of $33.68 compared to its current price of $17.51.
What is CHWY's P/E ratio?
Chewy's P/E (TTM) is 29.2x, which is significantly below its 5-year median P/E of 115.7x, indicating the stock is trading at a discount to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Key Takeaways Chewy added nearly 200,000 net customers as Autoship generated 84.4% of Q1 sales.CENT grew pet segment sales 5%, supported by Dog & Cat and Animal Health product strength.CENT expanded margins and formed a distribution venture with Phillips Pet Food & Supplies. Chewy, Inc. (CHWY - Free Report) and Central Garden & Pet Company (CENT - Free Report) are two prominent players in the pet care industry, each pursuing distinct strategies to capitalize on the resilient demand trends and evolving consumer preferences.
Chewy, with a market capitalization of roughly $8 billion, has established itself as a leading digital-first pet care platform. The company’s growth is fueled by its successful Autoship subscription model, expansive e-commerce infrastructure and growing presence in pet healthcare through pharmacy services, veterinary clinics and telehealth offerings.
In contrast, Central Garden & Pet, with a market capitalization of approximately $3 billion, operates a diversified portfolio spanning pet and garden categories. The company owns a collection of leading brands across pet consumables, animal health, treats, pet bird products and outdoor living categories. Its business benefits from strong retail relationships, a broad distribution network and acquisitions.
As investors evaluate opportunities within the sector, the question remains: which company currently offers better upside?
The Case for CHWYChewy continues to strengthen its position as a leading digital pet-care platform, supported by steady market-share gains, rising customer engagement and a resilient business model. The company delivered 7.7% sales growth in the first quarter of fiscal 2026 and added nearly 200,000 net customers, reflecting the durability of pet spending and the strength of its value proposition. These trends position Chewy to outperform the broader pet category despite a softer consumer environment.
A key pillar of Chewy’s growth is its Autoship program, which accounted for 84.4% of first-quarter fiscal 2026 net sales and continued to outpace overall company growth. The subscription-based model enhances customer retention, improves revenue visibility and supports higher lifetime value. In addition, growing penetration of health and wellness products helped drive net sales per active customer to $597, reinforcing wallet-share gains across the platform.
Technology is also becoming an increasingly important competitive advantage. Chewy is embedding artificial intelligence across customer service, fulfillment, pharmacy and marketing operations to improve efficiency and enhance customer experiences. Management expects AI initiatives to generate low 10s of millions of dollars in benefits during fiscal 2026, creating a scalable path toward further margin expansion and operational leverage.
The company is simultaneously expanding its presence in pet healthcare, one of the largest growth opportunities within the industry. Chewy Vet Care clinics continue to support customer acquisition and retention, while the acquisition of Modern Animal adds a complementary technology-enabled veterinary platform. Together, these initiatives are expected to accelerate clinic expansion, with Chewy targeting approximately 60 clinics by the end of fiscal 2026 and an embedded revenue contribution approaching $290 million at steady state.
Chewy recently lowered its fiscal 2026 sales outlook to $13.40-$13.55 billion from the previously mentioned $13.6-$13.75 billion, reflecting a more cautious consumer backdrop, softer premiumization trends and lower product attach rates. Despite these near-term pressures, the company continues to gain market share and expand profitability through sponsored advertising, favorable product mix, healthcare growth and AI-driven efficiencies.
The Case for CENTCentral Garden & Pet is benefiting from a stronger operational foundation built through years of cost and simplicity initiatives. The company continues to streamline its operations through distribution network optimization, manufacturing consolidation and supply-chain efficiencies, creating a more agile and efficient business model. Recent actions, including the integration of DoMyOwn into its Covington fulfillment center and the consolidation of manufacturing operations within its dog and cat platform, are enhancing execution, lowering costs and improving scalability.
The company's diversified portfolio across pet and garden categories remains a key competitive advantage, providing stability and broad market exposure. In the second quarter of fiscal 2026, the pet segment’s sales increased 5% year over year to $477 million, driven by continued strength in Dog & Cat and Animal Health products. Central also maintained overall market share while recording gains in categories such as rawhide, dog treats, flea and tick, pet bird, and professional products, highlighting resilient demand across its core pet businesses.
Central Garden & Pet is also improving the quality of its earnings through portfolio optimization, a favorable product mix and disciplined execution. Management continues to focus on higher-margin consumables categories, particularly dog and cat, equine and professional products, while leveraging productivity initiatives across the organization. These efforts contributed to the pet segment operating margin expansion of 290 basis points to 16.3% and adjusted EBITDA margin growth of 200 basis points to 18.6% in the latest quarter, demonstrating the benefits of a more streamlined and profitable operating model.
Growth is further supported by innovation, strategic partnerships and disciplined capital allocation. Following the quarter, Central Garden & Pet partnered with Phillips Pet Food & Supplies to create a more efficient nationwide pet distribution network. The transaction simplifies the company's operating model, reduces complexity and allows greater focus on its branded portfolio while retaining a 20% ownership stake in the venture. At the same time, Central Garden & Pet continues to invest in innovation across brands such as Nylabone and Farnam, strengthening retailer relationships and supporting growth opportunities.
Central Garden & Pet's strong financial position provides additional flexibility to execute its growth strategy. The company ended the second quarter with $653 million in cash and cash equivalents, gross leverage of 2.8X and no borrowings under its credit facility. Supported by a strong balance sheet, ongoing productivity improvements and the reaffirmed fiscal 2026 adjusted EPS guidance of $2.70 or better, Central Garden & Pet appears well-positioned to drive profitable growth and long-term shareholder value creation.
How Does the Zacks Consensus Estimate Compare for CHWY & CENT?The Zacks Consensus Estimate for Chewy’s current fiscal-year sales and EPS implies growth of 7.2% and 20.5%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates an 7.6% rise in sales and 22.2% growth in earnings. The consensus estimate for EPS for the current fiscal year has decreased 10 cents to $1.53 over the past 60 days, while for the next fiscal year, it has declined by 12 cents to $1.87.
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The Zacks Consensus Estimate for Central Garden & Pet’s current fiscal-year sales and EPS implies a decline of 5.7% and growth of 5.9%, respectively, from the year-ago period’s actuals. For the next fiscal year, the consensus estimate indicates a 6.4% decline in sales and 7.3% growth in earnings. The consensus estimate for EPS for the current and next fiscal year has increased 7 cents and 11 cents, respectively, to $2.89 and $3.10, respectively, over the past 60 days.
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Assessing Recent Stock Performances of CHWY & CENTChewy’s shares have lost 32.8% over the past three months. Meanwhile, Central Garden & Pet’s stock has gained 15.2%.
Image Source: Zacks Investment Research
Dive Into Stock Valuations of CHWY & CENTChewy is trading at a forward price-to-sales (P/S) multiple of 0.53, down from its median of 0.97 in the last three years. Central Garden & Pet’s forward 12-month P/S multiple sits at 0.96, above its median of 0.74 in the last three years.
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CHWY or CENT: Which Offers Greater Potential?While Chewy remains an attractive long-term player with strong digital capabilities, recurring customer engagement and expanding healthcare initiatives, Central Garden & Pet currently appears to hold the edge for investors. The company’s diversified business model, strong portfolio of established brands, ongoing operational improvements and disciplined capital allocation provide a balanced combination of stability and profitability.
In addition, Central Garden & Pet’s focus on higher-margin categories, partnerships and consistent execution has strengthened its competitive position. With improving analyst sentiment, solid financial flexibility and a proven ability to drive efficiency while maintaining market share, Central Garden & Pet offers a more compelling opportunity.
Chewy currently carries a Zacks Rank #4 (Sell), whereas Central Garden & Pet flaunts a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Chewy's Autoship sales hit $10.50B in fiscal 2025 and rose 10.5% to $2.83B in Q1 fiscal 2026.Chewy is expanding health, pharmacy and veterinary services to deepen ties and grow wallet share.Chewy cut fiscal 2026 revenue outlook to $13.40-$13.55B amid cautious consumers and softer demand. Chewy, Inc. (CHWY - Free Report) is leaning on a business model that looks less like traditional discretionary retail and more like a recurring pet-care platform.
Autoship remains the core of that model, while health, pharmacy and veterinary services are giving Chewy new ways to deepen customer relationships and expand wallet share.
How CHWY Built a Recurring Revenue EngineAutoship customer sales reached $10.50 billion in fiscal 2025, representing 83.3% of net sales. In the first quarter of fiscal 2026, Autoship sales rose 10.5% year over year to $2.83 billion and accounted for 84.4% of net sales.
That mix matters because recurring orders create better revenue visibility than one-time purchases. Pet food, medication and other replenishment categories also support retention because customers value convenience and reliability.
Why Chewy Is Expanding Beyond Core Pet RetailChewy is moving beyond food and supplies into a broader pet health ecosystem. Its platform includes Chewy Vet Care, PracticeHub, SmartPak and Modern Animal, along with pharmacy and other health offerings.
These moves add physical touchpoints and broaden Chewy’s role in the customer journey. Chewy Vet Care customers are attractive because about 40% are new to Chewy, and those customers tend to reach year-one net sales per active customer of about $900.
SmartPak is expected to contribute $80 million to fiscal 2026 net sales. Modern Animal is expected to add $70 million, and Chewy expects to exit fiscal 2026 with roughly 60 clinics.
What Is Driving Margin Gains at ChewyProfitability is becoming a larger part of Chewy’s investment case. In the first quarter of fiscal 2026, gross margin expanded 50 basis points year over year to 30.1%.
Adjusted EBITDA increased 31.3% to $253.1 million, while adjusted EBITDA margin improved 130 basis points to 7.5%. The gains were supported by sponsored ads, category mix, supply-chain efficiencies, fulfillment productivity, marketing productivity and operating discipline.
Chewy, which competes with Petco Health and Wellness Company (WOOF - Free Report) and Central Garden & Pet Company (CENT - Free Report) , is also using artificial intelligence across customer service, pharmacy operations, fulfillment and marketing workflows. Management expects AI-driven efficiencies to provide a low tens of millions of dollars benefit in fiscal 2026, with a larger ramp expected in 2027 and beyond.
Where CHWY Faces Pressure in 2026The near-term setup is not without pressure. Management cited a more cautious consumer backdrop, with softer premiumization and lower product attachment rates weighing on net sales per active customer.
Chewy, which carries a Zacks Rank #4 (Sell), lowered its fiscal 2026 revenue outlook to $13.40-$13.55 billion from $13.60-$13.75 billion. The company no longer assumes a meaningful acceleration in consumer spending for the balance of fiscal 2026.
Margin cadence is another watch item. Second-quarter gross margin is expected to contract modestly year over year because of tougher comparisons, while fuel surcharges are expected to create a mid-single-digit million-dollar cost burden.
Image Source: Zacks Investment Research
How Chewy’s Zacks Signals Fit the StoryThe bottom line is that Chewy has a durable recurring revenue base, a larger pet health opportunity and improving margin performance. Those positives are being balanced against a weaker consumer backdrop and reduced revenue expectations.
The Zacks view is Neutral, indicating expectations for performance broadly in line with the market rather than a clear near-term outperform signal. That stance fits a stock with improving structural profitability but visible spending and margin-cadence risks.
Style-based signals are best used as complements to estimate-revision signals. A stronger Value Score, Growth Score, Momentum Score or VGM Score would usually add support to a favorable Rank profile, while weaker scores would call for more selectivity. For CHWY, investors have enough operating progress to monitor, but the near-term case still depends on Autoship durability, health expansion and whether consumer spending stabilizes.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways CHWY looks cheaper after a 42.9% year-to-date drop and trades near its five-year sales multiple low.Autoship sales rose 10.5% to $2.83B, making up 84.4% of Chewy's first-quarter net sales.Chewy cut fiscal 2026 net sales guidance amid softer premiumization and product attachment rates. Chewy, Inc. (CHWY - Free Report) has become harder to frame after a sharp selloff and lower fiscal 2026 revenue outlook.
The question is whether the decline has created a better entry point or whether softer consumer behavior still argues for patience. Investors need to weigh valuation against recurring revenue strength, margin progress and execution risk.
Why CHWY Looks Cheaper on Sales MultiplesCHWY, which carries a Zacks Rank #4 (Sell), trades at 0.56X forward 12-month sales. That is well below the Zacks sub-industry at 1.99X, the Zacks sector at 1.50X and the S&P 500 at 5.17X. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The stock is also near the low end of its five-year sales multiple range. CHWY has traded as high as 4.01X, as low as 0.55X and at a median of 1.18X. That helps explain why some investors may see less downside from valuation compression after the stock’s 42.9% year-to-date decline and 54.6% slide over the past year.
Why Chewy Still Supports a Bullish CaseChewy’s bull case still starts with Autoship, which gives the business a recurring revenue base that many retailers lack. In the first quarter of fiscal 2026, Autoship customer sales rose 10.5% year over year to $2.83 billion and represented 84.4% of net sales.
Customer metrics remain supportive. Active customers increased 3.6% year over year to 21.5 million, while net sales per active customer reached $597. Pet health, SmartPak and Modern Animal add another layer by expanding Chewy beyond core online retail and into higher-engagement services.
Profitability also keeps the debate from turning one-sided. First-quarter adjusted EBITDA rose 31.3% to $253.1 million, and adjusted EBITDA margin expanded 130 basis points to 7.5%. Fiscal 2026 adjusted EBITDA margin guidance of 6.6-6.8% still implies about 100 basis points of expansion at the midpoint.
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Why CHWY Still Warrants Investor CautionThe risk is that valuation may not be enough if sales expectations keep moving lower. Chewy reduced its fiscal 2026 net sales outlook to $13.40-$13.55 billion from $13.6-$13.75 billion, even with expected acquisition contributions.
Management cited pressure on premiumization and product attachment rates among existing customers. That matters because net sales per active customer is a key growth driver, and a cautious consumer could keep discretionary categories under pressure.
Near-term margin cadence is less clean. Second-quarter gross margin is expected to contract modestly year over year due to difficult comparisons. Acquisition and integration costs, a modest margin drag from Modern Animal and $10-$15 million of expected fiscal 2026 net interest expense from the Term Loan B add to the caution.
What Could Change the Chewy Stock DebateThe most important signal would be stabilization in consumer spending. If premiumization and attachment rates improve, pressure on net sales per active customer could ease.
Customer additions are another checkpoint. Chewy, which competes with Petco Health and Wellness Company (WOOF - Free Report) and Central Garden & Pet Company (CENT - Free Report) , still expects net additions near the lower end of the prior 150,000-250,000 quarterly range, so stronger customer growth would help support confidence in share gains.
Execution in health is equally important. SmartPak is expected to contribute $80 million to fiscal 2026 net sales, while Modern Animal is expected to add $70 million. Investors should also watch whether artificial intelligence-driven efficiencies, expected to contribute low tens of millions of dollars in fiscal 2026, support cost savings.
How the Zacks View Frames CHWY TodayThe bottom line is that CHWY looks inexpensive on sales, but not risk-free. A 0.56X forward sales multiple is hard to ignore, yet the lower revenue view shows that cheaper valuation has not offset weaker demand signals.
The Zacks view is Neutral, indicating a balanced stance rather than a decisive buy signal after the selloff. That fits a stock with recurring revenue, improving margins and healthcare expansion, but also softer consumer trends and added execution costs.
For investors who lean on the Zacks Rank and Zacks Style Scores, the clearest signal here is the Neutral view. Style Scores complement the Zacks Rank across value, growth and momentum characteristics, but valuation alone has not yet overridden the company’s near-term demand concerns.
Key Takeaways Chewy is using pet healthcare and AI to build a clearer fiscal 2026 earnings story.SmartPak and Modern Animal are expected to add $150 million to Chewy's fiscal 2026 net sales.CHWY lowered its 2026 sales outlook as premiumization and product attachment rates face pressure. Chewy, Inc. (CHWY - Free Report) is trying to turn two investments into a clearer earnings story in fiscal 2026. Pet healthcare can broaden the revenue base, while artificial intelligence can reduce cost to serve.
The setup is not without friction. Consumers remain cautious, but CHWY’s margin levers are becoming more structural than inflation-driven.
How CHWY Is Building a Bigger Health PlatformChewy’s healthcare push spans vet clinics, pharmacy capabilities, PracticeHub, compounding, CarePlus, SmartPak and Modern Animal. That gives the company more points of contact with pet parents beyond food, treats and supplies.
The logic is customer depth. Roughly 40% of Chewy Vet Care customers are new to Chewy, and those customers tend to reach year-one net sales per active customer of about $900.
SmartPak is expected to add $80 million to fiscal 2026 net sales, while Modern Animal is expected to contribute $70 million. About 20,000 veterinary practices were enrolled in PracticeHub, representing an estimated 50% of U.S. vet clinics.
These assets can link commerce, pharmacy and clinical care. That can raise lifetime value and reduce reliance on retail alone.
Why AI Matters More to Chewy Margins NowChewy, which competes with Petco Health and Wellness Company (WOOF - Free Report) and Central Garden & Pet Company (CENT - Free Report) , is embedding AI across customer service, pharmacy operations, fulfillment and marketing workflows. The goal is lower cost to serve, faster processes and better service quality.
Management expects AI-driven efficiencies to deliver a low tens of millions of dollars benefit in fiscal 2026. A larger ramp is expected in 2027 and beyond.
AI also supports personalization, search relevance and marketing productivity, which can help conversion and engagement.
That makes AI a margin and growth-quality lever. It can help fund investments in health, clinics, fulfillment optimization and customer acquisition.
What CHWY Gains From Ads and AutomationChewy’s margin story is also supported by sponsored ads, automation, forecasting and fulfillment improvements. These tools matter because the company is still investing while trying to expand adjusted earnings faster than sales.
In the first quarter of fiscal 2026, gross margin increased 50 basis points year over year to 30.1%. Adjusted EBITDA rose 31.3% to $253.1 million, and adjusted EBITDA margin expanded 130 basis points to 7.5%.
Sponsored ads, favorable category mix, supply-chain efficiencies, marketing productivity and operating discipline all contributed to the improvement. The company maintained fiscal 2026 adjusted EBITDA margin guidance of 6.6-6.8%.
Why Consumer Trends Still Limit Chewy’s UpsideThe near-term issue is demand quality. Management cited incremental pressure on premiumization and product attachment rates across existing customers, which is weighing on net sales per active customer.
Some of Chewy’s higher-value initiatives depend on customers buying more across categories. If consumers stay focused on essentials, healthcare and AI benefits may not fully show up in revenue growth right away.
Chewy, which carries a Zacks Rank #4 (Sell), lowered its fiscal 2026 net sales outlook to $13.40-$13.55 billion from $13.6-$13.75 billion. The company no longer assumes a meaningful acceleration in consumer spending for the rest of fiscal 2026. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Image Source: Zacks Investment Research
How Zacks Signals Shape the Trend ThesisThe bottom line is that CHWY has a credible emerging-trends story, but the earnings path is not fully de-risked. Healthcare expands the opportunity, and AI gives management an efficiency route, yet softer consumer behavior still limits near-term conviction.
A Neutral Zacks signal fits that balance. It points to a stock expected to perform in line with the market rather than one with a clearly superior near-term setup.
Investors should also separate that signal from Zacks Rank and Style Scores. The Rank is built around earnings estimate revisions, while Style Scores assess Value, Growth, Momentum and the combined VGM profile.
A stronger Rank-and-Style combination would typically improve the near-term screen. For CHWY, the trend thesis is improving, but the consumer backdrop and execution demands still argue for a measured view.
Key Takeaways Chewy stock fell 45% in three months, lagging peers, its industry and the broader market.Lower FY26 sales guidance and softer customer spending have pressured growth expectations.Autoship growth, pet healthcare expansion and AI initiatives support profitability and market share. Chewy Inc. (CHWY - Free Report) has experienced a steep decline over the past three months, with its shares tumbling 45.3%, underperforming the industry’s dip of 0.2%. The company also trailed the Retail - Wholesale sector’s 1.9% return and the S&P 500 index’s 11% rise.
CHWY’s Past 3 Months’ Performance
Image Source: Zacks Investment Research
Chewy’s stock has come under pressure as a softer consumer environment has weighed on discretionary spending and premium product purchases. Lower customer spending growth and a reduced fiscal 2026 sales outlook have raised concerns about near-term growth momentum. Macroeconomic headwinds have limited the impacts of the company’s growth initiatives. Despite these challenges, Chewy continues to gain market share and expand profitability.
Chewy has also underperformed its peers, including Central Garden & Pet Company (CENT - Free Report) , Petco Health and Wellness Company, Inc. (WOOF - Free Report) and BARK, Inc. (BARK - Free Report) .
Shares of Central Garden & Pet have increased 31.7%, while Petco Health and BARK have declined 10% and 24.8%, respectively, over the past three months.
CHWY vs. Peer Performances
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Closing at $17.77 yesterday, the CHWY stock stands 59.5% below its 52-week high of $43.84 reached on June 26, 2025. Chewy is trading below its 50 and 200-day simple moving averages of $23.06 and $29.98, respectively, signaling bearish sentiment in maintaining the recent performance levels.
CHWY Trades Below 50 & 200-Day Moving Averages
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The recent slide in the stock has contributed to Chewy’s discounted status. This leading online retailer of pet products and services is currently trading at a compelling discount relative to its industry. The CHWY stock trades at a trailing 12-month price-to-sales (P/S) ratio of 0.58, lower than the industry’s average of 2.22.
CHWY’s Valuation Picture
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This valuation is especially notable when compared with peers such as Central Garden & Pet, which has a trailing 12-month P/S of 0.83X, Petco Health at 0.13X and BARK at 0.21X.
What’s Behind Chewy’s Dismal Stock Run?Chewy’s stock has struggled as the company faces slowing growth expectations despite delivering solid operating results. Management lowered its fiscal 2026 net sales guidance to $13.40-$13.55 billion from the previous $13.60-$13.75 billion, reflecting a softer consumer environment and weaker category growth assumptions. The revised outlook raises concerns about the company's near-term revenue trajectory.
Consumer spending trends have emerged as another key headwind. Management noted growing pressure on premiumization and product attachment rates among existing customers, indicating that pet owners are becoming more selective with discretionary purchases. As a result, growth in net sales per active customer, a critical driver of Chewy's long-term growth story, is facing pressure. The company also expects active customer additions to trend toward the lower end of the previously stated 150,000-250,000 per quarter.
Investors are also concerned that several growth initiatives are not producing the acceleration management initially anticipated. Efforts such as Autoship enhancements, improved customer engagement tools and digital advertising initiatives are generating benefits, but their impacts have been muted by the challenging macroeconomic backdrop. Consequently, management no longer expects a meaningful acceleration in consumer spending to support growth during the remainder of fiscal 2026.
Margin-related concerns add another layer of caution. While Chewy maintained its full-year adjusted EBITDA margin outlook, the recently acquired Modern Animal business is expected to create a modest profitability drag in fiscal 2026.
The company is also incurring acquisition and integration expenses related to SmartPak and Modern Animal, and recently launched a $600-million Term Loan B transaction that will increase interest expenses and leverage. Combined with management's warning that consumer spending conditions could deteriorate further, these factors have weighed heavily on investor sentiment and contributed to the stock's sharp decline.
CHWY’s Downward Estimate Revisions Raise ConcernsThe downward revision in earnings estimates has added to investor concerns surrounding the stock. The Zacks Consensus Estimate for earnings per share (EPS) has moved down over the past seven days. Estimates for the current quarter have decreased 3 cents to 37 cents per share, while estimates for the next quarter have declined 2 cents to 39 cents.
Image Source: Zacks Investment Research
Chewy’s Game Plan to Overcome Current ChallengesCHWY continues to benefit from its highly recurring Autoship business, which remains a key source of revenue stability. In the first quarter of fiscal 2026, Autoship sales increased more than 10% year over year and accounted for 84.4% of the total net sales. The strength of this subscription-based model supports customer retention, revenue visibility and ongoing market-share gains, helping Chewy navigate a softer consumer spending environment.
The company is also expanding its presence in the attractive pet healthcare market through Chewy Vet Care and the acquisition of Modern Animal. Management expects the combined clinic network to reach roughly 60 locations by the end of fiscal 2026, creating opportunities for customer acquisition, higher wallet shares and long-term revenue growth. Healthcare remains one of Chewy’s largest growth avenues and strengthens the company's competitive positioning beyond traditional pet retail.
In addition, Chewy is leveraging AI, automation and operational efficiencies to strengthen profitability and offset macroeconomic pressures. The company is embedding AI across customer service, pharmacy, fulfillment and marketing operations, while benefiting from growth in sponsored advertising, supply-chain improvements and operating leverage. These initiatives are helping Chewy expand earnings and generate a strong free cash flow despite a challenging consumer backdrop.
How to Play CHWY Stock: Buy, Hold or Sell?Chewy continues to benefit from its recurring Autoship business, growing pet healthcare platform and investments in AI-driven efficiencies. However, these strengths are being overshadowed by slowing customer spending, weaker premiumization trends, a reduced fiscal 2026 sales outlook and downward earnings estimate revisions. Acquisition-related costs, higher interest expenses and a challenging consumer environment add uncertainty to the near-term growth outlook.
Given these headwinds, existing investors may consider reducing exposure or waiting for clearer signs of growth stabilization, while prospective investors may prefer to remain on the sidelines. Chewy currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Key Takeaways Chewy's Autoship sales increased more than 10%, with the program representing 84.4% of net sales.CHWY benefits from higher customer spending, with net sales per active customer reaching $597.CHWY enhances Autoship and digital marketing tools to support customer acquisition and engagement. Chewy, Inc.’s (CHWY - Free Report) Autoship continued to be a key driver of the company’s performance. In the first quarter of fiscal 2026, Autoship customer sales reached approximately $2.83 billion, increasing more than 10% year over year and accounting for 84.4% of total net sales. Notably, Autoship growth outpaced overall company growth, highlighting the strength of customer adoption and engagement with the program. Management emphasized that this performance reinforces the durability, visibility, and predictability of the company’s recurring revenue model.
The strength of this model is reflected in the Net Sales Per Active Customer, which reached $597 in the quarter, a 4.6% year-over-year increase. The Autoship program acts as a recurring revenue engine that strengthens Chewy’s competitive moat and supports its structural profitability. It is particularly effective for consumables and healthcare categories, which are fueled by the Autoship flywheel. Management emphasized opportunities to enhance customer growth and engagement through continued improvements to its Autoship platform and digital marketing capabilities.
Chewy expects refinements in the Autoship product flow to accelerate product line attachment rates, while enhanced digital advertising bidding algorithms are intended to support faster customer acquisition. These initiatives are designed to improve the effectiveness of customer engagement and drive stronger growth across the platform.
The company is seeing healthy engagement from active customers, demonstrating sustained interaction with its platform and offerings. The Autoship program also remains a strong contributor to performance, reflecting ongoing customer adoption and retention. In addition, the company continues to gain market share, underscoring the effectiveness of its value proposition and competitive positioning within the market. Overall, Chewy's growing Autoship adoption, resilient customer spending trends and ongoing platform enhancements position the program as an important driver of long-term growth.
Zacks Rundown for CHWYCHWY shares have lost 26.8% in the past three months against the industry’s 11.8% growth. The company carries a Zacks Rank #4 (Sell) at present.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a forward price-to-earnings ratio of 18.29, lower than the industry’s average of 21.90.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for earnings for the current and next fiscal year indicates year-over-year growth of 20.5% and 22.2%, respectively.
Image Source: Zacks Investment Research
Stocks to ConsiderSome better-ranked stocks have been discussed below:
Carvana Co. (CVNA - Free Report) operates an e-commerce platform for buying and selling used cars, currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CVNA delivered a negative trailing four-quarter earnings surprise of 71.6%, on average. The Zacks Consensus Estimate for CVNA’s current financial-year sales implies growth of 38.5%, and the same for earnings implies a decline of 6.5% from the year-ago reported numbers.
Commerce.com, Inc. (CMRC - Free Report) provides an artificial intelligence-driven commerce ecosystem in the United States, Europe, the Middle East, Africa, the Asia Pacific, and internationally. CMRC currently sports a Zacks Rank of 1. The company delivered a trailing four-quarter earnings surprise of 187.9%, on average.
The Zacks Consensus Estimate for CMRC’s current financial-year sales and earnings indicates growth of 2.7% and 57.7%, respectively, from the year-ago reported numbers.
Central Garden & Pet Company (CENT - Free Report) produces and distributes various products for the lawn and garden, and pet supplies markets in the United States. It currently carries a Zacks Rank of 1.
CENT delivered a trailing four-quarter earnings surprise of 45.4%, on average. The Zacks Consensus Estimate for CENT’s current financial-year sales implies a decline of 5.7%, and the same for earnings implies growth of 5.9% from the year-ago reported numbers.
Choosing between a traditional apparel retailer and a digital-first pet supplier requires a look at how each company handles shifting consumer habits. American Eagle Outfitters (AEO +4.15%) and Chewy (CHWY +2.70%) represent two different paths in the retail landscape.
American Eagle Outfitters focuses on brand loyalty through physical stores and fashion trends, while Chewy leverages a recurring subscription model to dominate the pet care space. Investors often compare them to see which business model offers better stability during periods of economic uncertainty.
American Eagle Outfitters operates as a global specialty retailer focused on the American Eagle and Aerie brands. The company is a prominent name among apparel stocks, focusing heavily on teen and young adult demographics through its 1,168 company-owned stores. Its strategy recently shifted to focus on core brand profitability after closing its Quiet Platforms third-party fulfillment business in fiscal 2025.
In FY 2025, the company reported revenue of nearly $5.5 billion, up approximately 3.2% from the previous year. Net income for the period reached $192.0 million, resulting in a net margin of roughly 3.5%. This was a decrease from the 6.2% net margin recorded in the prior fiscal year, reflecting a more challenging environment for discretionary spending.
As of its January 2026 balance sheet, the company maintains a debt-to-equity ratio of 1.0x. This ratio measures total debt relative to shareholder equity, indicating how much a business relies on borrowing to fund its operations. The current ratio, which measures the ability to cover short-term debts with assets like cash and inventory, is roughly 1.5x, and the company generated free cash flow of approximately $195.4 million.
The case for ChewyChewy has built a massive digital presence by offering pet parents a convenient way to shop for food, medications, and supplies. The company relies heavily on its Autoship program, which provides recurring revenue by automatically sending products to customers on a set schedule. In April 2026, the company expanded its physical footprint by acquiring Modern Animal, a move intended to grow its network of veterinary clinics to 47 locations.
During FY 2025, Chewy saw its revenue grow by roughly 6.2% to reach nearly $12.6 billion. Despite this top-line growth, the company reported net income of approximately $222.8 million, corresponding to a net margin of 1.8%. This net margin was lower than the 3.3% achieved in the prior year, as the company invested in expanding its veterinary services and health infrastructure.
Based on the February 2026 balance sheet, Chewy carries a debt-to-equity ratio of approximately 1.1x. Its current ratio of 0.9x suggests that short-term liabilities slightly exceed short-term assets, a common pattern for retailers with high inventory turnover. The company generated free cash flow of nearly $562.4 million, though stock-based compensation accounted for roughly 43.1% of operating cash flow, inflating reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparisonAmerican Eagle Outfitters faces significant risks from a new 10% global tariff that took effect in late February 2026. This policy creates uncertainty regarding merchandise costs and could strain supply chain stability if trade tensions escalate. Furthermore, the company remains sensitive to inflation, which often causes customers to pull back on clothing purchases in favor of essential goods.
Chewy must contend with intense competition from massive retailers like Amazon (AMZN +3.01%) and Walmart (WMT 0.72%), which offer similar pet products and fast shipping. The company also faces corporate governance risks, as BC Partners retains significant voting power that could create conflicts of interest with minority shareholders. Additionally, its expansion into the veterinary sector requires strict adherence to evolving healthcare regulations, which could lead to fines if compliance is not maintained.
Valuation comparisonAmerican Eagle Outfitters trades at a much lower forward P/E than Chewy, though both companies share a low P/S ratio.
MetricAmerican Eagle OutfittersChewySector BenchmarkForward P/E10.3x23.0x29.6xP/S ratio0.6x0.6xSector benchmark uses the SPDR XLY sector ETF.
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?It’s interesting to compare two retail businesses that have completely different products and markets. One of these two depends on fashion trends and consumer discretionary spending. The other benefits from pet owners' recurring purchases. Which business is more resilient and likely to provide the best long-term investment?
American Eagle Outfitters is a well-established brand with a loyal following. It has delivered revenue growth and pays a regular dividend to its shareholders. It also trades at a low valuation relative to its earnings. But the apparel market is intensely competitive, and when consumer spending wanes, so do companies’ margins.
Chewy sells pet food, supplies, and healthcare products – including prescription medications -- and has been expanding into veterinary care. Its autoship program is a lever for customer loyalty and recurring purchases. While many of Chewy’s products fall under the discretionary purchases category, pet owners will always spend on pet food and medications even in a weak economy. Chewy’s valuation is higher than AE’s, but the business is generally more predictable.
Both stocks are attractive to investors. They both are profitable, with loyal customers and strong market share. But I would choose Chewy because I believe its business model is resilient and diversified, and it appears better positioned to deliver long-term growth.
The market is still near record highs, and as such, valuations remain sky-high. That doesn't necessarily mean every ticker is priced out of reach, however. If you're willing to dig deep enough, you can find growth stocks still worth stepping into.
To this end, here's a closer look at three brilliant long-term growth stocks you can buy right now, and actually feel good about doing so.
Image source: Getty Images.
1. Chewy Online pet supply retailer Chewy's (CHWY +2.70%) shareholders can't seem to catch a break. Just when it looked like the stock might finally be snapping out of its post-pandemic pullback, in the latter half of last year, shares started slumping again. Blame the economic backdrop, mostly, which has only worsened since then.
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Now take a closer look at its results, and in particular, last quarter's numbers. Chewy's revenue improved 7.7% year over year, pumping up per-share profits from $0.15 to $0.23, both of which topped analysts' estimates. Profit margins widened, too, while the portion of sales coming from autoship customers -- customers who have automated regular, recurring shipments of their pets' supplies -- expanded again, from 82.2% to 84.4%. The company's doing everything it's supposed to be doing.
Sure, guidance disappointed. The company dialed back its full-year revenue outlook from an expected range of $13.6 billion to $13.75 billion to a new range of only $13.4 billion to $13.55 billion. Just don't lose perspective on the updated figures. That's still 7% better than last year's top line, at the midpoint of this year's expected sales. Not bad. It's also arguable the company is just making sure it's able to top expectations.
This might help you muster the confidence to step into this falling stock: Despite the ticker's continued selling, analysts aren't deterred. The majority of them still rate Chewy shares a strong buy, with a consensus price target of $30.82. That's more than 60% above the stock's present price. Clearly, they're seeing something most investors aren't, although it might be more accurate to say the analyst community is looking past all the noise that's distracting investors.
2. DraftKings It's not exactly a secret why DraftKings (DKNG +0.27%) shares have been struggling since early last year. Already facing slowing growth due to its sheer size, the online sports-betting brand has seen new competition enter the market. Namely, prediction market platform Kalshi began tiptoeing onto its turf in January 2025, with Polymarket moving into the same arena by the end of the year. Investors understandably panicked.
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Now that the dust has settled, though, it's becoming clear that these rivals aren't quite the threat to DraftKings they were first feared to be. Last quarter's revenue grew 17% year over year to $1.65 billion, creating scale that produced a much bigger improvement in earnings before interest, taxes, depreciation, and amortization (EBITDA).
Credit the brand name, mostly. While Polymarket and Kalshi may offer sports-based wagering, DraftKings is a long-established name that's well known among sports fans. This has allowed it to create team-specific partnerships like its recently unveiled affiliation with the St. Louis Blues hockey team, as well as partnerships with high-profile entertainment brands like NBCUniversal and ESPN. Although we've seen some, these aren't agreements that most such outfits are likely interested in making with Kalshi or Polymarket, as they don't bring their own sports-focused crowd to the table.
That being said, while it's unlikely that Polymarket and Kalshi will establish themselves as sports-wagering destinations (both platforms are facing fresh regulatory scrutiny, in fact), know that DraftKings has tiptoed into their turf by acquiring prediction market platform Railbird, launching a stand-alone prediction market mobile app in December. It's still building this business into what it will ultimately be, however, with key developments like the launch of a proprietary exchange and an upgrade to a super-app slated for later this year.
The market's somewhat starting to believe again, sending DraftKings shares up more than 30% from their late-March low. This only scratches the surface, however, of the ground that's been lost since the latter half of last year.
3. Rocket Lab Finally, add Rocket Lab (RKLB 0.53%) to your list of growth stocks to buy right now, while shares are down almost 30% from last month's peak. That may be all the discount you're going to see here for a while.
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Whether or not the Space Exploration Technologies IPO was positive or negative for Rocket Lab is up for debate. The high-profile public offering certainly put the entire space-launch industry on investors' radars. But it also fomented the idea that SpaceX, which the company is commonly called, is in a position to dominate the business.
On balance, however, it's more of a win than not for Rocket Lab simply because it highlights the sheer scope of the orbital launch business, which has plenty of room for other players to thrive. SpaceX's IPO prospectus indicates that the space industry itself will eventually be worth $370 billion per year. Although SpaceX will certainly be winning a large portion of this market, it's not necessarily competing head-to-head with Rocket Lab.
See, SpaceX's launch focus has been and remains putting the heaviest of payloads into orbit (its biggest rocket is called "Falcon Heavy"). Rocket Lab is best known for its smaller -- and reusable -- Electron rocket capable of putting 660 pounds' worth of payload into low-Earth orbit. It's also successfully developed a medium-lift rocket called Neutron that can ferry more than 28,000 pounds' worth of equipment into orbit, and is testing this launch vehicle right now. These two launch options are not only affordable, but in many cases just more practical for organizations that only need to put a relatively small satellite into space. It matters because, according to an outlook from Global Market Insights, medium lift launches will account for more than half of the future launch market, as will low-Earth-orbit launches.
Also bear in mind that while Rocket Lab's smaller rockets are impressive, most of its revenue comes from providing the technology found within satellites. This may be the much bigger and more predictable business.
Consumer goods companies have been under pressure as shoppers pull back on spending amid higher prices. This has created volatility in the stock prices for leading brands in the sector, including those that are still reporting solid financial results.
But near-term macro headwinds give patient investors the chance to own top growth stocks at attractive discounts, setting up attractive returns over a longer time period. Here are three beaten-down growth stocks worth buying now.
Image source: Getty Images.
1. Chewy Chewy (CHWY 2.43%) continues to see growth in its active customer base, helping to deliver another solid quarter of sales growth. In the recent quarter, it added over 200,000 net customer additions and reported a 7.7% year-over-year sales increase. It operates in a large pet industry, providing ample runway for this leading pet food supplier to expand.
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Despite inflation, pet owners are still expected to spend $165 billion this year, up from $158 billion in 2025, according to the American Pet Products Association. That shows an enormous opportunity for Chewy, which generated $12.8 billion in trailing-12-month revenue.
The company benefits from a loyal customer base. Over 84% of net sales are driven through its autoship program. It is also pushing into pet healthcare services such as Chewy Vet Care clinics. This can strengthen its competitive position while also layering in a more profitable sales stream.
Near-term pressure on consumer spending is a headwind to watch in 2026. But for a patient investor, Chewy looks undervalued. The stock trades at just 12 times forward earnings, with analysts currently expecting 32% annualized earnings growth over the next several years.
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2. Cava Group Cava Group (CAVA 2.48%) is tapping into pent-up demand for Mediterranean-style eating in the fast-casual restaurant industry. The stock has rebounded year to date, but is still trading well off its all-time high from a few years ago.
Cava's recent performance looks quite strong in a weak consumer spending environment. Same-restaurant sales have increased in every quarter the past two years. Same-restaurant sales jumped 9.7% year over year in the recent quarter -- a significant improvement over 0.5% in the previous quarter.
It has a long runway of growth. Chipotle Mexican Grill has over 4,100 restaurants, while Cava ended the recent quarter with just 459. This indicates ample opportunity for Cava to expand and deliver market-beating returns to shareholders.
The stock looks expensive on a price-to-earnings basis, but on a forward price-to-sales basis, it is more reasonably priced at 7 times. Cava is profitable but should see improving margins as it expands across the U.S. If it meets analysts' expectations for earnings growth of about 26% annually in the coming years, the stock could outperform the broader market.
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3. e.l.f. Beauty e.l.f. Beauty (ELF +5.08%) has become a very popular brand by offering high-quality beauty products at affordable prices. It just posted its seventh straight year of market share gains, with net sales surging 25% in fiscal 2026.
The stock is down 22% year to date and trading at a forward P/E of 18. The dip reflects uncertainty around macro headwinds impacting consumer spending. However, e.l.f. continues to post solid results.
The company is leveraging its popular cosmetics brand to expand to more product categories. It is seeing explosive growth in skincare from Rhode, the Hailey Bieber line it acquired last year, and Naturium. Management sees significant opportunities ahead for its skincare business, which is gaining share in a highly competitive market.
One reason the stock is down is lower margins from tariffs. Management is also investing in growth initiatives, which have increased operating expenses. But in the long term, the company should see healthy margins. Its trailing-12-month free cash flow improved to $190 million.
The focus on near-term headwinds in the economy has lowered investor expectations, as analysts are calling for just 10% annualized earnings growth. This seems too conservative given the brand's popularity and its potential for international expansion. The stock's relatively modest valuation sets up a compelling buy-the-dip opportunity.
Key Takeaways Chewy sees Vet Care as a growth driver, targeting a $54B market across services and in-clinic products.CHWY says about 40% of Vet Care customers are new, generating roughly $900 in first-year net sales.Modern Animal acquisition supports expansion to about 60 clinics by the end of fiscal 2026. Chewy, Inc. (CHWY - Free Report) is increasingly leveraging its veterinary care operations as a powerful tool for customer acquisition and retention. Management highlighted that Chewy Vet Care (“CVC”) clinics are delivering strong stand-alone economics, while strengthening the broader Chewy ecosystem. The company views pet healthcare as a major growth opportunity, with an estimated total addressable market of approximately $54 billion, including more than $40 billion tied to veterinary services and in-clinic products.
The company’s vet care strategy is already generating meaningful customer growth. According to management, roughly 40% of CVC customers are new to Chewy. These customers tend to become highly valuable over time, reaching approximately $900 in first-year net sales per active customer. In addition, existing Chewy customers who visit CVC clinics increase their share of wallet with the company at a faster rate than other customer groups, highlighting the effectiveness of the clinics in driving deeper customer engagement.
Chewy believes its technology-enabled operating model provides an advantage in veterinary services. The company utilizes AI-assisted tools and digital workflows to improve clinic productivity, veterinarian retention and employee satisfaction. Management noted that these capabilities are particularly important in an environment where qualified veterinarians remain in short supply, giving Chewy a structural advantage as it expands its clinic network.
To accelerate growth, Chewy recently completed the acquisition of Modern Animal, a technology-focused veterinary clinic operator. The transaction adds an established clinic footprint, strong clinical expertise and attractive unit economics that complement the Chewy Vet Care model. Following the acquisition, the company expects to operate approximately 60 clinics by the end of fiscal 2026, significantly expanding its presence in the pet healthcare market.
Management views veterinary care as one of the fastest-growing contributors to customer spending and long-term value creation. By integrating clinics with its pharmacy, healthcare and e-commerce offerings, Chewy is building a more comprehensive pet-care platform. As the clinic footprint expands and customer adoption grows, Chewy expects Vet Care to play an increasingly important role in driving customer acquisition, retention and market-share gains over the long term.
CHWY’s Price Performance, Valuation & EstimatesChewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 23.2% in the past three months against the industry’s growth of 6.1%. Meanwhile, BARK shares have declined 41% and Petco has dipped 18.8%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.63X, below the industry’s average of 2.16X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.21) and Petco (0.13).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 and 2027 earnings implies year-over-year growth of 23.6% each. Estimates for fiscal 2026 and 2027 have been revised downward by 4 cents each in the past seven days.
Chewy (CHWY +2.88%) shares failed to gain traction after the company reported another strong fiscal first quarter and lowered its full-year revenue guidance slightly due to a more cautious consumer. The stock is now down about 40% on the year.
Let's take a closer look at the pet products e-commerce operator's results and prospects to see if this is a buying opportunity.
Image source: The Motley Fool.
Solid growth in the face of a weakening consumer Despite earlier warnings that it was not completely immune to a weak consumer, Chewy delivered strong results. Revenue jumped 7.7% to $3.36 billion, a smidge ahead of analyst expectations. Meanwhile, adjusted earnings per share climbed 23% to $0.43, meeting the consensus estimate.
It saw its active customers rise 3.6% year over year to 21.5 million, while net sales per active customer grew 2.4% to $597. Sales derived from autoship customers, meanwhile, climbed 10.5% to $2.83 billion and accounted for 84.4% of its total revenue.
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Importantly, margins continued to increase. Its gross margin rose by 50 basis points to 30.1%, while its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins jumped from 6.2% to 7.5%. This helped lead to a 31.2% increase in adjusted EBITDA to $253.1 million.
Looking ahead, the company guided for fiscal Q2 revenue of between $3.3 billion and $3.33 billion, representing growth of 6.3% to 7.5%, with adjusted EBITDA margins of 6.3% and 6.4%, up 50 basis points year over year.
For the full year, the company lowered expectations, taking it to a range of $13.40 billion to $13.55 billion, good for 6.3% to 7.5% growth, versus a prior outlook for revenue between $13.6 billion and $13.75 billion, representing growth of between 8% and 9%. It continues to expect adjusted EBITDA margins to expand 100 basis points to between 6.6% to 6.8%.
A cheap stock with strong operating leverage While Chewy slightly lowered its full-year guidance, the company's overall business model remains very resilient, as the majority of sales come from customers enrolled in its autoship program. The company's cautious tone is not unique among retailers, with consumers being pinched by high inflation and gasoline prices.
Meanwhile, the company continues to see solid margin expansion. It's seeing solid operational efficiency as it adopts artificial intelligence, while boosting gross margins from its sponsor ad business. Given Chewy's modest operating margins, continued margin expansion should be a big profit driver moving forward.
With the stock trading at a forward P/E of just 13 times the current-year analyst consensus, the stock is a bargain given its growth, expanding operating margins, and resilient business model. I'd be a buyer at these levels.
Key Takeaways Chewy's Autoship sales rose more than 10% y/y, exceeding overall net sales growth.CHWY increased active customers to 21.5M, while net sales per active customer rose to $597.Chewy expects Autoship to support long-term retention, recurring revenues and market-share gains. Chewy, Inc.’s (CHWY - Free Report) Autoship business remained a key contributor to growth in the first quarter of fiscal 2026. Autoship customer sales increased more than 10% year over year to $2.83 billion and accounted for 84.4% of the total net sales. The growth rate exceeded the company’s overall net sales rise of 7.7%, demonstrating the continued strength of recurring purchases across the platform.
The program’s performance contributed to the total net sales of $3.36 billion during the quarter. Active customers increased 3.6% year over year to 21.5 million, while net sales per active customer rose to $597. Management stated that Autoship sales continued to outpace overall company growth, reinforcing the predictability, durability and recurring nature of Chewy’s revenue base.
According to management, consumables and healthcare categories, supported by the Autoship program, continued to perform well despite pressure on discretionary spending and premiumization trends. The company also noted that customer churn improved and reactivation rates remained healthy in the fiscal first quarter.
To further strengthen the platform, Chewy is investing in initiatives aimed at increasing product attachment rates within Autoship orders. The company expects these efforts to drive higher customer lifetime value over time, although macroeconomic pressures have tempered near-term spending on discretionary items. Management indicated that quarterly net customer additions are likely to trend toward the lower end of its previous target of 150,000-250,000 per quarter.
For fiscal 2026, Chewy expects net sales between $13.40 billion and $13.55 billion, indicating year-over-year growth of 6.3-7.5%. As the company expands its customer base and deepens engagement across the platform, Autoship is expected to remain a key driver of recurring revenue growth, customer retention and market-share gains over the long term.
CHWY’s Price Performance, Valuation & EstimatesChewy, which competes with BARK, Inc. (BARK - Free Report) and Petco Health and Wellness Company, Inc. (WOOF - Free Report) , has fallen 26.3% in the past three months against the industry’s growth of 7.8%. Meanwhile, BARK shares have declined 39.1% and Petco has dipped 21.9%.
Image Source: Zacks Investment Research
From a valuation standpoint, CHWY trades at a trailing price-to-sales ratio of 0.62X, below the industry’s average of 2.15X. It has a Value Score of A. CHWY is trading at a premium to BARK (with a trailing 12-month P/S ratio of 0.20) and Petco (0.13).
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHWY’s fiscal 2026 earnings implies year-over-year growth of 26.8%, whereas the same for fiscal 2027 indicates an uptick of 23.3%. Estimates for fiscal 2026 and 2027 have been revised downward by 2 cents each, respectively, in the past 30 days.
Chewy, Inc. (NYSE:CHWY) will release earnings for its first quarter before the opening bell on Wednesday, June 10.
Analysts expect the Plantation, Florida-based company to report quarterly earnings of 28 cents per share. That's down from 35 cents per share in the year-ago period. The consensus estimate for Chewy's quarterly revenue is $3.37 billion. It reported $3.12 billion last year, according to Benzinga Pro.
The company has beaten analyst estimates for revenue in five straight quarters and in seven of the last 10 quarters overall.
Shares of Chewy rose 1.2% to close at $20.40 on Tuesday.
Benzinga readers can access the latest analyst ratings on the Analyst Stock Ratings page. Readers can sort by stock ticker, company name, analyst firm, rating change or other variables.
Let's have a look at how Benzinga's most-accurate analysts have rated the company in the recent period.
Considering buying CHWY stock? Here’s what analysts think:
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PLANTATION, Fla.--(BUSINESS WIRE)--Chewy, Inc. (NYSE: CHWY) (“Chewy”), a trusted destination for pet parents and partners everywhere, has released its financial results for the first quarter of fiscal year 2026 ended May 3, 2026. Fiscal Q1 2026 Highlights: Net sales of $3.36 billion increased 7.7 percent year over year Gross margin of 30.1 percent increased 50 basis points year over year Net income of $94.8 million, including share-based compensation expense and related taxes of $73.4 million N.
1. Casey's Posts EPS Jump, Predicts Slowing Growth Casey's General Stores (CASY 1.25%) – recommended in Stock Advisor by Team Rule Breakers as a 'Cautious' investment – reported a record fiscal year with fourth-quarter earnings yesterday, with EPS soaring 66.2% year over year (YoY). The company raised its quarterly dividend 14%, for the 27th consecutive year of increases.
"Our team closed out the three-year strategic plan on an extremely high note": CEO Darren Rebelez also spoke of "$714 million of net income and nearly $1.5 billion in EBITDA." Management expects profit growth to moderate in the current fiscal year, guiding for 2% to 5% growth in same-store inside sales. The stock gained around 1% in pre-market trading. "Casey's has a great business model that really, in many ways, it couldn't be simpler": Fool contributing analyst Dan Caplinger recently noted the simplicity of Casey's business model: "Sell gas, sell pizza, sell some other convenience store goods, and focus on areas where there just aren't going to be that many alternatives." 2. Apple Cozies up With Google Apple (AAPL 1.27%) has announced plans to collaborate with Alphabet's (GOOG 0.47%) Google and Nvidia (NVDA 0.44%) to expand its Private Cloud Compute (PCC). Currently restricted to in-house data centers, the move will expand Apple's AI offerings to run on Google Cloud. Nvidia, Intel (INTC +2.06%), and Google silicon will provide the power.
"PCC set a new bar for AI privacy in the cloud": Stressing customer data security, an Apple blog post told us PCC on Google Cloud "incorporates PCC's exceptional security and privacy properties at every stage." "Apple is looking more dependent than ever on Google": Parmy Olson at Bloomberg highlighted Apple's deepening relationship with its major competitor, suggesting "In some respects Apple is becoming a wrapper around Google's capabilities." The new Gemini-powered Siri, meanwhile, will not initially launch in the European Union or China due to regulatory issues. 3. Volatility Hits Nasdaq and Chip Stocks S&P 500 futures dipped close to 1% this morning as geopolitical stability fractured in the Middle East, with Nasdaq futures down more than 1.4%. This follows a volatile session for chip stocks yesterday, as anticipation of Friday's SpaceX IPO builds. By early afternoon, the Philadelphia Semiconductor Index had slumped nearly 9% on the day, before a late rally saw tech stocks recover much of their early losses.
A "sign of excessive speculation": In a recent client note from head of U.S. equity Savita Subramanian, strategists at Bank of America (BAC +0.67%) pointed to stocks on high P/E ratios significantly outperforming lower P/E stocks, noting 7 of their 10 bear-market signals have been triggered in the past few months. "Investors are more pessimistic after their home country loses in the World Cup knockout round": Here's one for the soccer fans, as Mark Hulbert at MarketWatch observed that if a country loses in the elimination stage, its stock market dips the next day on average. The USMNT takes on Paraguay on Friday... SpaceX IPO day! 4. Today's Earnings You Won't Want to Miss Oracle (ORCL 1.59%) is due to report fourth-quarter earnings after today's closing bell, in a week that saw OpenAI file documentation ahead of its planned IPO. The company hasn't decided on timing, but its reliance on Oracle Cloud Infrastructure gives investors something extra to watch.
Cloud Infrastructure revenue growth of 91% expected: Ambitious Wall Street guidance suggests Oracle will build on Q3 cloud revenue growth of 44% YoY, when management set a full-year revenue target of $90 billion. Chewy (CHWY 2.61%) –recommended by Team Rule Breakers – reported 7.7% net sales growth YoY in Q1 this morning, with nearly 200,000 net customer additions, and saw gross and net margins improve. The stock rose over 5% in a pre-market response. 5. Today's Take: Is It a Bargain – Or Just Cheap?
A cheap stock is when the investment thesis relies on other investors to pay a higher multiple. A stock is a bargain when the management team is actively converting the cheap valuation into an opportunity through share repurchases, asset sales, spinoffs, or even an outright sale of the company.-- Anthony Schiavone
I tend to start out assuming the market's got it right and the stock is cheap for a reason. The key is figuring out the reason. Is it company-specific or more market-related? Does leadership continue to move the goal posts? I look to identify the catalyst(s) that will turn things around.-- Jason Moser Team Rule Breakers
6. Your Take Which, if any, positions have you sold all or some of from your portfolio in the last month, and why?
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This image and article was created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. Bank of America is an advertising partner of Motley Fool Money. The Motley Fool has positions in and recommends Alphabet, Apple, Chewy, Intel, Nvidia, and Oracle. The Motley Fool recommends Casey's General Stores. The Motley Fool has a disclosure policy.
The online pet-supplies retailer said it now expects net sales to come in between $13.4 billion and $13.55 billion this year, down from a prior forecast of $13.6 billion to $13.75 billion.
Chewy (CHWY - Free Report) came out with quarterly earnings of $0.43 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.35 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +0.51%. A quarter ago, it was expected that this online pet store would post earnings of $0.28 per share when it actually produced earnings of $0.27, delivering a surprise of -3.57%.
Over the last four quarters, the company has surpassed consensus EPS estimates two times.
Chewy, which belongs to the Zacks Internet - Commerce industry, posted revenues of $3.36 billion for the quarter ended April 2026, surpassing the Zacks Consensus Estimate by 0.15%. This compares to year-ago revenues of $3.12 billion. The company has topped consensus revenue estimates four times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Chewy shares have lost about 38.3% since the beginning of the year versus the S&P 500's gain of 7.9%.
What's Next for Chewy?While Chewy has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Chewy was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.40 on $3.36 billion in revenues for the coming quarter and $1.61 on $13.62 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Internet - Commerce is currently in the bottom 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the broader Zacks Retail-Wholesale sector, Levi Strauss (LEVI - Free Report) , has yet to report results for the quarter ended May 2026.
This jeans maker is expected to post quarterly earnings of $0.24 per share in its upcoming report, which represents a year-over-year change of +9.1%. The consensus EPS estimate for the quarter has been revised 0.5% higher over the last 30 days to the current level.
Levi Strauss' revenues are expected to be $1.52 billion, up 4.8% from the year-ago quarter.
From CrowdStrike to Chewy, These Tanking Stocks Are Announcing BuybacksChewy NYSE: CHWY reported first-quarter fiscal 2026 results that showed continued sales growth, higher profitability and strong free cash flow, while management lowered its full-year sales outlook to account for a softer consumer environment in the pet category.
Chief Executive Officer Sumit Singh said the online pet retailer “delivered solid results in Q1, continuing to outperform the broader pet category while further expanding profitability and free cash flow.” He said the company added nearly 200,000 net customers during the quarter and continued to capture category share, even as consumer conditions weakened late in the period.
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Chewy Gobbles up Market Share in 2026: Poised to Advance in Q2First-quarter net sales rose 7.7% year over year to approximately $3.36 billion. Chewy ended the quarter with 21.5 million active customers, up 3.6% from the prior year. Net sales per active customer, or NSPAC, increased to $597.
Autoship remained a key contributor to the company’s recurring revenue base. Autoship customer sales increased more than 10% year over year to approximately $2.83 billion and represented 84.4% of total net sales in the quarter.
Margins Expand Despite Softer Consumer Backdrop Can These 3 Names Be 2026’s Biggest Retail Comebacks?Chewy reported first-quarter gross margin of 30.1%, up about 50 basis points year over year. Chief Financial Officer Chris Deppe said gross margin benefited from Sponsored Ads, favorable category mix and continued operating discipline, partly offset by a low single-digit million-dollar impact from fuel surcharges passed on by carrier partners.
Adjusted EBITDA reached approximately $253 million, representing a 7.5% adjusted EBITDA margin. That was up about 130 basis points from the prior year, with adjusted EBITDA flow-through of more than 25%. Adjusted net income was approximately $180 million, or adjusted diluted earnings per share of $0.43.
Free cash flow was approximately $71 million, up more than 45% year over year. The company generated approximately $109 million of net cash from operating activities and spent approximately $38 million on capital expenditures.
Deppe said the profitability gains reflected “the structural strengthening of Chewy’s earnings model,” including contributions from gross margin improvement, Sponsored Ads, fulfillment productivity, operating discipline and broader operating leverage.
Full-Year Sales Outlook Reduced Management lowered its fiscal 2026 net sales outlook to a range of approximately $13.40 billion to $13.55 billion, representing year-over-year growth of about 6.3% to 7.5%. The outlook includes expected fiscal 2026 net sales contributions of approximately $80 million from SmartPak and approximately $70 million from Modern Animal.
Chewy maintained its full-year adjusted EBITDA margin guidance of 6.6% to 6.8%, implying approximately $900 million of adjusted EBITDA at the midpoint of the revenue and margin ranges.
Singh said the updated guidance reflects a more conservative view of consumer spending and category growth for the rest of the year. He said Chewy is seeing “a modest level of incremental pressure on premiumization and product attach rates” among existing customers, creating a short-term headwind to NSPAC.
Deppe said discretionary attachment and premiumization behavior are under more pressure than expected. He also said Chewy no longer believes it is prudent to assume a meaningful acceleration in consumer spending in the back half of the year.
For the second quarter, Chewy expects net sales of approximately $3.30 billion to $3.33 billion, representing about 6% to 7% growth. The company also introduced quarterly adjusted EBITDA margin guidance, projecting second-quarter adjusted EBITDA margin of 6.3% to 6.4% and adjusted diluted EPS of approximately $0.36.
Deppe said second-quarter profitability will face more difficult year-over-year gross margin comparisons because of non-recurring MAP pricing benefits in the prior-year period, along with elevated fuel surcharge costs that are expected to create a roughly mid-single-digit million-dollar headwind.
Health, Vet Care and Acquisitions Remain Strategic Focus Management highlighted Chewy Health and Chewy Vet Care as major long-term growth initiatives. Singh said pet healthcare represents approximately $54 billion of total addressable market, including more than $40 billion tied to in-clinic products and veterinary services.
Singh said Chewy Vet Care clinics are producing strong standalone economics while also serving as customer acquisition and retention channels for the broader Chewy platform. Approximately 40% of Chewy Vet Care customers are new to Chewy, and those customers tend to reach year-one NSPAC of about $900, according to Singh.
The company closed its acquisition of SmartPak during the quarter and completed its acquisition of Modern Animal shortly after quarter-end. Singh said Modern Animal adds a complementary clinic footprint with above-industry unit economics and a technology-enabled model aligned with Chewy Vet Care.
Deppe said Chewy had 18 Chewy Vet Care clinics at the end of the prior fiscal year and added 29 clinics through Modern Animal, bringing the total to 47. The company still plans to open 10 to 12 new Chewy Vet Care clinics in fiscal 2026 and expects to exit the year with roughly 60 clinics.
AI and Sponsored Ads Cited as Margin Drivers Chewy also said it continues to deploy artificial intelligence across customer service, pharmacy operations, fulfillment and marketing workflows. Singh said the company still expects AI-driven efficiencies to contribute a low tens of millions of dollars in fiscal 2026, with a larger ramp expected in 2027 and beyond. In response to an analyst question, Singh confirmed that the company still expects more than $50 million in AI-related savings in fiscal 2027.
Sponsored Ads remained another margin expansion driver. Singh said the company exited fiscal 2025 at roughly the midpoint of its expected 1% to 3% contribution range and continues to expect about two-thirds to 70% of the contribution at full entitlement to flow to the bottom line. He said Chewy is expanding beyond on-site ads into off-site ads and highlighted the launch of Chewy Max, a product designed to help advertisers collaborate with the company more efficiently.
Management Says Share Gains Continue During the question-and-answer session, analysts asked whether the weaker environment reflected macroeconomic pressure or company-specific issues. Singh said Chewy is “very clearly gaining share,” citing internal data, competitive data and stronger direct and branded search traffic toward Chewy. He said absolute clicks increased by mid-single-digit percentages year over year even as industry-level trends weakened.
Singh said Chewy is not seeing signs of a material change in the competitive environment. He described the broader retail promotional environment as active but rational and said Chewy will remain disciplined in promotions and marketing investment, prioritizing long-term return on customer acquisition rather than dilutive growth.
“While the consumer environment has become modestly more challenged, our first quarter results reinforce that the power of the Chewy model remains durable and continues to strengthen,” Singh said in closing remarks.
About Chewy NYSE: CHWYChewy, Inc NYSE: CHWY is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.
Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.
This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].
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For the quarter ended April 2026, Chewy (CHWY - Free Report) reported revenue of $3.36 billion, up 7.7% over the same period last year. EPS came in at $0.43, compared to $0.35 in the year-ago quarter.
The reported revenue represents a surprise of +0.15% over the Zacks Consensus Estimate of $3.35 billion. With the consensus EPS estimate being $0.43, the EPS surprise was +0.51%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how Chewy performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Active customers: 21,497 compared to the 21,612 average estimate based on six analysts.Net sales per active customer: $597.00 compared to the $597.19 average estimate based on four analysts.Net Sales- Hardgoods: $394.8 million compared to the $384.06 million average estimate based on three analysts. The reported number represents a change of +15.4% year over year.Net Sales- Consumables: $2.29 billion versus $2.31 billion estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +5.3% change.View all Key Company Metrics for Chewy here>>>
Shares of Chewy have returned -10.9% over the past month versus the Zacks S&P 500 composite's no change. The stock currently has a Zacks Rank #4 (Sell), indicating that it could underperform the broader market in the near term.
Chewy Inc CHWY opened in the “red” this morning after coming in shy of EPS estimates for its fiscal Q1 and offering guidance that signals continued weakness in the current quarter.
Investors are bailing on CHWY mostly because the financial release reinforces CEO Sumit Singh’s recent comment that the US consumer is more “stretched” than at the beginning of 2026.
Speaking at a JPMorgan conference, Singh said customers are buying essential items like pet food and medicine, but spending less on extras like toys due to resurfacing inflationary pressures.
Still, for those in it for the long haul, Chewy stock appears rather compelling after the post-earnings decline.
At the time of writing, CHWY shares are trading at a 52-week low of just under $20, representing a nearly 40% year-to-date decline – yet the underlying business is still growing.
In Q1, revenue was up 7.7% year-on-year, gross margin improved by 50 bps to a solid 30.1%, and adjusted EBITDA went up $60 million.
So this clearly isn’t a company in distress – it’s a company being priced like one (0.67x sales).
Chewy shares remain worth owning also because of its Autoship subscription program that’s really the backbone of its revenue – it drives recurring, predictable, largely recession-resistant demand.
Pet food and medicine aren’t discretionary. Yes, customers are cutting back on toys and accessories – but the core recurring order business is sticky and hard for competitors to disrupt easily.
Moreover, the company’s push into pet healthcare (Vet Care clinics) and its pharmacy/prescription business is an under-appreciated growth vector that doesn’t show up clearly in the near-term revenue outlook.
As that segment scales, it will help expand the addressable market and deepen “customer lock-in” beyond the commodity grocery/supplies business – potentially driving the stock price higher over time.
Investors should also note that CEO Sumit Singh’s recent dovish consumer commentary reflects the current inflationary environment – not a permanent shift in pet ownership economics.
Pet spending has proven remarkably “resilient” through previous downturns; when inflation eases, discretionary pet spending (the category weighing on guidance) typically snaps right back.
Simply put, at current levels, you are essentially buying a premium business at a trough valuation tied to a temporary macroeconomic cycle.
Finally, Ryan Cohen’s gradual exit has been a persistent “seller-of-record” weight on CHWY stock for years.
As that overhang clears, the technical selling pressure structurally diminishes, removing a ceiling that has suppressed its recovery.
Together, these positives are keeping Wall Street bullish on Chewy Inc, with the consensus rating staying put at “Strong Buy”, and the mean price target of $40 signaling potential upside of roughly 100% from current levels.
Pet retail has been written off as a low‑growth corner of consumer spending, but the market is missing a major shift in how recurring revenue and logistics efficiency are reshaping the industry. Chewy's latest quarter shows a clear break from the past: stabilizing demand, rising Autoship penetration, and disciplined cost control are finally translating into real operating leverage. With margins inflecting, EBITDA scaling, and the stock still priced for stagnation, Chewy now offers a mispriced setup where improving fundamentals aren't reflected in today's valuation.
This is a fair market value price provided by Massive. Learn more.
52-Week Range$18.38▼
$43.84P/E Ratio30.49
Price Target$32.62
Chewy NYSE: CHWY is not without hurdles or headwinds, like any consumer retailer this year. However, market fears are clouding an otherwise bullish outlook, setting the stage for a massive stock price rebound over time. Critical factors include the company’s digital-first presence, its strength in dailies and consumables, and the visibility of cash flow.
The digital-first presence enables ease of access and autoship features, factors that underpin strength in other areas. While pet retailers with a more physical presence lean into services, Chewy continues to gain share in categories like food, grooming and healthcare, while leading the industry in growth.
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Visible Cash Flow and Share Buybacks Are Good Reasons to Own CHWYAutoship is central to the investment thesis. Autoship not only provides convenience for consumers but also a highly visible revenue stream for Chewy and its investors. As it stands, Autoship continues to lead segment growth, up 10.5% in Q1 2026, with its contribution also increasing. Autoship accounted for 84.4% of quarterly revenue and will likely continue to gain share, if at a slower pace, driven by customer gains and penetration. Other quarterly highlights include 200,000 net new customers, up nearly 1% from the last quarter, and a 2.4% increase in revenue per customer.
Growth is a fundamental factor in the stock price outlook, as it drives value improvement, but cash flow matters most in 2026. While growth is slowing on a YOY basis, margins are widening, cash flow is improving, and capital returns are flowing. The company isn’t paying dividends yet but may in the future; today’s returns are share buybacks sufficient to reduce the share count quarterly. The FQ1 results reflect a 1.45% reduction in share count, a pace the company will likely sustain. The only red flag is quarterly cash flow, which was negative, but that is to be expected. Cash flow trends reveal Q1 as the weakest of the year; subsequent quarters will be much different.
The balance sheet reflects the impact of cash flow, capital return, and acquisitions. Cash is down significantly, resulting in lower current and total assets. Current liabilities are also up, but debt remains at zero, and total liabilities are flat, setting the stage for improvements in upcoming quarters. Assuming the expected cash flow, the company’s balance sheet and equity will improve as soon as the current quarter, despite share buybacks and sustain improvement in the subsequent period.
Analysts Highlight Value Opportunity in CHWY InvestmentAnalysts' sentiment trends undercut market strength and underscore that the market is overreacting. While price targets are being cut, the market has moved below the low end of the range, opening a deep value opportunity. Trading near $20, CHWY is about 12X its FY2027 forecasts and 4X its 10-year outlook, suggesting value today and over the long term. Assuming CHWY stock can unlock value, the 4X multiple relative to the 10-year forecast sets the stage for a 200% increase in the stock price over time; all that's needed is the execution of the strategy.
Until then, the 24 analysts MarketBeat tracks rate this stock as a Moderate Buy with an 80% Buy-side bias. While the price target revision trend is negative, sentiment has firmed in recent months, and there is considerable upside potential in the consensus outlook. While down from its highs, the early-June consensus of $41.24 represents more than 100% upside if reached.
Institutions Support CHWY Stock: Limit Risk in 2026Near-term price action is weak; a move below $20 is possible, but CHWY stock is unlikely to linger long at these prices. The market is overextended at these levels, as reflected by an Oversold stochastic and a diverging MACD. The likely outcome is that buyers will begin to emerge in the coming months, triggering a Buy signal. Institutional data suggests this group will be among the buyers. They own more than 90% of the stock, have bought on balance over the TTM period, and bought in early Q2. The likely outcome is that they limit downside, accelerating their activity as the share price declines.
Chewy’s risks include the integration and expansion of its services business. The company is trying to compete with legacy providers, serving health and grooming needs. Not only is cost an issue, but scaling also faces challenges that will be reflected in results. Missteps and setbacks will be reflected in the stock price. Catalysts include the impact of AI on operations and consumer satisfaction, as well as the services expansion. Successful scaling of the higher-margin businesses will also be reflected in the stock’s price.
Should You Invest $1,000 in Chewy Right Now?Before you consider Chewy, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Chewy wasn't on the list.
While Chewy currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.
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Key Takeaways CHWY beat revenues by a hair and added nearly 200K customers, but said conditions weakened late-quarter.Chewy cut FY26 sales view to $13.40B-$13.55B as attach rates and premiumization softened.Chewy kept the EBITDA margin guidance at 6.6-6.8% as ads, mix, fulfillment and AI lifted profits. Chewy, Inc. (CHWY - Free Report) used its fiscal first-quarter earnings call to make a clear distinction: the business is still gaining share, but the consumer backdrop has turned more cautious. Management’s message was centered on slower discretionary attachment and premiumization rather than a breakdown in core demand.
That framing mattered because it came with a lower full-year sales outlook, even as the company kept its margin target intact and continued to push deeper into health care, clinics and AI-led efficiency efforts.
CHWY Lowers the Top-Line BarAdjusted earnings per share came in at $0.43, matching the Zacks Consensus Estimate, while revenues of $3.36 billion edged past the Zacks Consensus Estimate of $3.35 billion by 0.1%. Net sales rose 7.7% year over year, helped by nearly 200,000 net customer additions.
Chief executive officer Sumit Singh said the business held up well through much of the quarter, but consumer conditions weakened later in the period. He pointed to more pressure on premiumization and product attach rates, which created what he described as a short-term headwind to net sales per active customer.
That shift led Chewy to cut its fiscal 2026 sales outlook to $13.40-$13.55 billion, or 6.3-7.5% growth. The company also guided for second-quarter sales of $3.30-$3.33 billion, saying its outlook now reflects a more conservative view of consumer spending for the rest of the year.
Chewy Holds the Margin LineThe notable counterpoint was profitability. Gross margin expanded 50 basis points to 30.1%, while adjusted EBITDA margin rose 130 basis points to 7.5%. Adjusted EBITDA climbed to $253.1 million, and free cash flow increased 45.4% to $70.8 million.
Chief financial officer Chris Deppe said margin gains were driven by sponsored ads, favorable mix, fulfillment productivity and operating discipline. He also said early AI-enabled efficiencies and lower variable costs helped deliver SG&A leverage, even as Chewy continued to invest in health, automation and customer acquisition.
Despite the lower revenue outlook, management maintained full-year adjusted EBITDA margin guidance at 6.6% to 6.8%. That implies Chewy believes structural earnings drivers are strong enough to offset softer spending and the modest margin drag tied to Modern Animal this year.
CHWY Leans Into Health and AISingh made health one of the central long-term themes of the call. He said pet health care represents a roughly $54 billion addressable market, including more than $40 billion tied to in-clinic products and veterinary services, and argued Chewy Vet Care is becoming both a growth engine and a customer acquisition tool.
Management said about 40% of clinic customers are new to Chewy and that those customers tend to generate about $900 in first-year net sales per active customer. After closing the Modern Animal acquisition, the company expects to operate roughly 60 clinics by the end of fiscal 2026, with embedded revenue contribution approaching about $290 million at steady state.
AI was the other strategic pillar. Singh said Chewy is deploying AI across customer service, pharmacy operations, fulfillment and marketing, and reiterated that these efforts should deliver a low tens of millions of dollars benefit in fiscal 2026, with a bigger ramp in 2027 and beyond.
Chewy Defends Share Gains in Q&AThe analyst Q&A focused on whether weakening trends reflected macro pressure or a competitive issue. In response to questions from JPMorgan and MoffettNathanson, Singh was emphatic that Chewy continues to gain share and said branded search, direct traffic, lower churn and healthy reactivations all point to a stable competitive position.
He also pushed back on the idea that Amazon’s same-day grocery push had altered the landscape in a meaningful way. Instead, management framed the slowdown as a broad consumer issue, with softer discretionary attachment and premium treat behavior weighing more heavily than any change in competitive intensity.
A Goldman Sachs analyst also pressed on investment cadence. Singh said Chewy is still funding initiatives that expand the total addressable market and improve efficiency, including Chewy Health, Autoship enhancements, automation and AI, while staying disciplined on customer acquisition returns.
CHWY Keeps a Disciplined StanceThe broader tone of the call was cautious on spending but confident on execution. Management acknowledged that several company-specific initiatives have produced gains, though not enough to justify embedding a stronger consumer rebound into the current forecast.
At the same time, Chewy continued to emphasize recurring revenue quality. Autoship sales rose 10.5% year over year to $2.83 billion and reached 84.4% of total net sales, underscoring the predictability of the model even as customer baskets face near-term pressure.
That leaves investors with a company still investing for a larger health and services opportunity while leaning on margin expansion, recurring revenue and free cash flow to absorb a more subdued consumer environment.
Chewy's Zacks SignalsCHWY currently carries a Zacks Rank #4 (Sell), alongside a Value Score of C, Growth Score of A, Momentum Score of D and VGM Score of A. Under the Zacks framework, the rank carries the most weight, and a Zacks Rank #4 points to weakening earnings estimate revisions even when some style characteristics remain favorable.
The Style Score still offers some context. The Growth Score of A and the VGM Score of A indicate attractive growth and blended style traits, but Zacks materials state that investors should not buy stocks with a Zacks Rank #4 or 5 (Strong Sell) even if Style Scores are strong. That signal can change as analysts revise estimates after the quarter, so the post-earnings revision trend remains the key item to watch.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about Chewy (CHWY - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Chewy currently has an average brokerage recommendation (ABR) of 1.52, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 27 brokerage firms. An ABR of 1.52 approximates between Strong Buy and Buy.
Of the 27 recommendations that derive the current ABR, 19 are Strong Buy and two are Buy. Strong Buy and Buy respectively account for 70.4% and 7.4% of all recommendations.
Brokerage Recommendation Trends for CHWY
Check price target & stock forecast for Chewy here>>>
While the ABR calls for buying Chewy, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Are you wondering why? The vested interest of brokerage firms in a stock they cover often results in a strong positive bias of their analysts in rating it. Our research shows that for every "Strong Sell" recommendation, brokerage firms assign five "Strong Buy" recommendations.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
The ABR is calculated solely based on brokerage recommendations and is typically displayed with decimals (example: 1.28). In contrast, the Zacks Rank is a quantitative model allowing investors to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Should You Invest in CHWY?Looking at the earnings estimate revisions for Chewy, the Zacks Consensus Estimate for the current year has declined 2.4% over the past month to $1.61.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Chewy. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Chewy with a grain of salt.
