Petcare product providers Chewy (NYSE:CHWY) and Petco (NASDAQ:WOOF) saw their shares surge on Thursday after Roaring Kitty posted a picture of a dog on social media site X. Chewy and Petco rose by as much as 28.48% and 11.11%. respectively, with trading volumes much higher than usual. However, those gains essentially disappeared by the end of today’s session. Nevertheless, today’s wild ride highlights Roaring Kitty’s influence on the market.
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It’s worth noting that both stocks have fairly high short interest, with Chewy at 13.8% of the total float and Petco at 19.8%. Still, this is nowhere near the number seen by GameStop (NYSE:GME) back in 2021, when the meme stock craze was in full swing.
However, Roaring Kitty wasn’t the only thing that Chewy had going for it today. In fact, it announced a $500 million equity repurchase agreement with BC Partners, which added to its existing $500 million buyback program. Analyst David Bellinger from Mizuho Securities, who has a Hold rating and a $20 price target, sees this as a sign of Chewy’s growing free cash flow and ability to return capital.
Are CHWY and WOOF Stocks a Buy?
Out of the aforementioned firms, Wall Street analysts believe that neither stock is a Buy. In fact, they expect their prices to decrease by over 10% during the next 12 months, as pictured below. Interestingly, professional money managers seem to agree, as neither stock has a Positive Hedge Fund Signal.
