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.
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.
