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Chewy Inc (CHWY)
:CHWY
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Chewy
(NYSE:CHWY)68Neutral
Positive Factors
Earnings
Net revenue growth of +4.8% outpaced consensus and guidance for roughly +3-4%, coupled with +80 bps of gross margin expansion.
Market Position
Chewy is seen as one of the clear Online Pet leaders with consistently very impressive Sat Scores.
Negative Factors
Valuation Concerns
Main investor concerns are centered around valuation, which is now approaching a high forward EV/EBITDA multiple.
Chewy (CHWY) vs. S&P 500 (SPY)
Market Cap
$14.68B
Dividend YieldN/A
Average Volume (3M)4.18M
Price to Earnings (P/E)37.1
Beta (1Y)1.53
Revenue Growth4.11%
EPS Growth3328.10%
CountryUS
Employees18,100
SectorConsumer Cyclical
Sector Strength53
IndustryRetail - Discretionary
Share Statistics
EPS (TTM)0.92
Shares Outstanding162,264,280
10 Day Avg. Volume4,626,471
30 Day Avg. Volume4,183,783
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)N/A
Price to Sales (P/S)1.28
Price to Cash Flow (P/CF)20.00
P/FCF Ratio24.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.47Price Target Upside17.92% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering21
Chewy Business Overview & Revenue Model
Company DescriptionChewy, Inc. is a leading online retailer specializing in pet products and services. Operating primarily through its e-commerce platform, Chewy offers a wide range of pet supplies, including food, toys, grooming products, and healthcare items for various types of pets such as dogs, cats, fish, birds, and more. Founded in 2011 and headquartered in Dania Beach, Florida, Chewy focuses on providing exceptional customer service and a convenient shopping experience for pet owners across the United States.
How the Company Makes MoneyChewy generates revenue primarily through the sale of pet products via its online platform. The company's key revenue streams include the sale of pet food, treats, and supplies, as well as health and wellness products. Chewy also offers an autoship subscription service, which provides customers with the convenience of automatic reordering of pet supplies at a discount, contributing to recurring revenue. Additionally, Chewy has expanded its offerings to include pet pharmacy services, enabling customers to purchase prescription medications online. Strategic partnerships with major pet product brands and competitive pricing further support Chewy's revenue growth.
Chewy Financial Statement Overview
Summary
Chewy exhibits strong revenue growth and improved profitability, evidenced by a positive net profit margin. While the company is highly leveraged, its cash flow generation capability is robust. Continued efforts in operational efficiency and debt management are essential for further financial strengthening.Income Statement
Chewy has shown robust revenue growth over the years, with a significant increase from 2020 to the TTM period. Gross profit margins have improved, reflecting better cost management or pricing strategies. The net profit margin has turned positive in the TTM period, indicating improved profitability. However, the EBIT and EBITDA margins were relatively modest, suggesting room for improvement in operational efficiency.82
Very Positive
Balance Sheet
The debt-to-equity ratio is high, indicating significant leverage, but it has improved over the years as equity has increased. The equity ratio is low, reflecting a capital structure heavily reliant on debt. Return on equity has improved significantly, signaling better utilization of shareholder funds.70
Positive
Cash Flow
Chewy's operating cash flow has shown consistent growth, supporting its ability to generate cash from operations. Free cash flow has also increased, indicating improved cash management. The operating cash flow to net income ratio is strong, suggesting efficient cash generation relative to reported profits.78
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 11.46B | 11.15B | 10.10B | 8.89B | 7.15B | 4.85B | Gross Profit |
| 3.29B | 3.16B | 2.83B | 2.37B | 1.82B | 1.14B | EBIT |
| 121.71M | -23.63M | 55.75M | -72.18M | -90.46M | -252.73M | EBITDA |
| 270.92M | 161.50M | 138.56M | -17.72M | -54.80M | -222.08M | Net Income Common Stockholders |
| 404.21M | 39.58M | 49.90M | -75.46M | -94.51M | -252.01M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.13B | 1.13B | 677.38M | 603.08M | 563.35M | 212.09M | Total Assets |
| 3.19B | 3.19B | 2.52B | 2.09B | 1.74B | 932.32M | Total Debt |
| 527.79M | 527.79M | 471.76M | 410.17M | 328.23M | 200.44M | Net Debt |
| -74.44M | -74.44M | 141.32M | -192.91M | -235.11M | -11.65M | Total Liabilities |
| 2.68B | 2.68B | 2.30B | 2.07B | 1.74B | 1.34B | Stockholders Equity |
| 510.24M | 510.24M | 213.96M | 14.74M | -2.00M | -403.97M |
| Cash Flow | Free Cash Flow | ||||
| 362.36M | 342.93M | 119.28M | 8.55M | 2.01M | -2.06M | Operating Cash Flow |
| 487.66M | 486.21M | 349.57M | 191.74M | 132.75M | 46.58M | Investing Cash Flow |
| 395.57M | -287.36M | -615.48M | -193.27M | -123.69M | -49.86M | Financing Cash Flow |
| -847.21M | 71.60M | -6.73M | 41.27M | 342.20M | 127.04M |
Chewy Technical Analysis
Neutral
34.32
Price Trends
36.50
Negative
33.68
Positive
29.50
Positive
Market Momentum
-0.44
Positive
38.94
Neutral
50.90
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHWY, the sentiment is Neutral. The current price of 34.32 is below the 20-day moving average (MA) of 36.86, below the 50-day MA of 36.50, and above the 200-day MA of 29.50, indicating a neutral trend. The MACD of -0.44 indicates Positive momentum. The RSI at 38.94 is Neutral, neither overbought nor oversold. The STOCH value of 50.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHWY.
Chewy Risk Analysis
Chewy disclosed 50 risk factors in its most recent earnings report. Chewy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Chewy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.08B | 19.28 | 8.00% | ― | -2.85% | -27.70% | |
68 Neutral | $14.68B | 37.12 | 180.92% | ― | 4.11% | 3328.10% | |
64 Neutral | $5.21B | 103.06 | 4.45% | ― | 27.16% | ― | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
59 Neutral | $1.47B | ― | -2.98% | ― | 15.97% | 78.77% | |
58 Neutral | $81.59M | 369.16 | 0.37% | ― | -10.82% | ― | |
45 Neutral | $741.52M | ― | -9.85% | ― | 1.30% | 91.08% |
* Consumer Cyclical Sector Average
Performance Comparison
CHWY
Chewy
34.32
16.95
97.58%
CENT
Central Garden Pet
34.98
-6.71
-16.09%
PETS
Petmed Express
3.95
-1.16
-22.70%
FRPT
Freshpet
94.65
-16.57
-14.90%
TRUP
Trupanion
33.09
5.09
18.18%
WOOF
Petco Health and Wellness Company
2.46
-0.14
-5.38%
Chewy Earnings Call Summary
Earnings Call Date: Dec 4, 2024 | % Change Since: 2.08% | Next Earnings Date: Mar 26, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with strong revenue growth, record-setting metrics in customer engagement, and successful international expansion. However, challenges in customer acquisition, a challenging macroeconomic environment, and a downward revision in sales guidance indicate areas of concern.Highlights
Strong Revenue Growth
Chewy reported $2.74 billion in net sales for Q3, up 8% year-over-year, outpacing the industry's low single-digit growth.
Record Net Sales Per Active Customer (NSPAC)
NSPAC exceeded $540, up nearly 14% year-over-year, demonstrating strong customer engagement.
Autoship Sales Growth
Autoship customer sales reached $2.09 billion in Q3, up 12.8% year-over-year, representing 76.4% of total net sales.
Pharmacy Business Milestone
Chewy's pharmacy business exceeded $1 billion in trailing 12-month net sales, making it the #1 pet pharmacy in America.
Successful Launch in Canada
Initial customer demand in Canada has been strong with high customer satisfaction and promising early indicators.
Record Gross Margin
Gross margin reached a new record of 28.5%, reflecting strong logistics performance and promotional management.
Strong Performance on Black Friday and Cyber Monday
Traffic and sales exceeded expectations, with new customer acquisition 40% higher than the Q3 weekly average.
Strong Free Cash Flow
Q3 free cash flow was $48.5 million, with trailing 12-month free cash flow exceeding $300 million.
Lowlights
Decline in Active Customers
Active customers declined marginally on a sequential basis, with the company ending Q3 with 20.3 million active customers.
Challenging Macro Environment
Softness in discretionary spending and the macro environment persists, affecting non-Autoship sales.
Guidance Revision
Chewy revised its full-year 2023 net sales outlook to $11.08 billion to $11.1 billion, representing a growth of approximately 10%, and updated its Q4 guidance to 3% growth.
Headcount Reduction
Chewy implemented headcount reductions in November as part of its 2024 strategic planning process.
Company Guidance
The guidance provided during Chewy's third-quarter 2023 earnings call was multifaceted, highlighting both achievements and expectations. Chewy reported $2.74 billion in net sales, an 8% increase compared to the prior year, with net sales per active customer reaching $543, a rise of nearly 14%. Autoship customer sales, which now constitute 76.4% of total net sales, grew by 12.8%. Gross margin hit a record 28.5%, and adjusted EBITDA margin remained steady at 3%. Looking forward, Chewy adjusted its fourth-quarter net sales guidance to between $2.78 billion and $2.8 billion, indicating a 3% year-over-year growth, and revised full-year 2023 net sales expectations to between $11.08 billion and $11.1 billion, representing a 10% increase from 2022. The company reiterated its full-year adjusted EBITDA margin outlook of 3% and expects its 2023 free cash flow to exceed 2.5 times that of 2022. Additionally, Chewy reported a strong liquidity position with $957.2 million in cash and marketable securities.Chewy Corporate Events
Executive/Board Changes
Chewy Expands Board with New Director Appointment
Positive
Feb 25, 2025
On February 21, 2025, Chewy, Inc. expanded its board of directors from twelve to thirteen members, appointing Ms. Deborah Ellinger as a Class II director. Ms. Ellinger, an experienced leader in the consumer products and solutions industry, brings a wealth of experience from her previous roles, including CEO positions at various private-equity backed companies. Her appointment is expected to enhance Chewy’s strategic direction and governance, with her term set to expire at the company’s annual meeting of stockholders in 2027.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.