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Chewy (CHWY) Outpaces Stock Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Chewy (CHWY) closed at $86.60, marking a +1.22% move from the previous day. This move outpaced the S&P 500's daily gain of 1.11%.

Heading into today, shares of the online pet store had gained 6.19% over the past month, outpacing the Consumer Staples sector's gain of 2.79% and the S&P 500's gain of 4.72% in that time.

CHWY will be looking to display strength as it nears its next earnings release. In that report, analysts expect CHWY to post earnings of $0.02 per share. This would mark year-over-year growth of 116.67%. Our most recent consensus estimate is calling for quarterly revenue of $2.12 billion, up 31.03% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0.17 per share and revenue of $8.95 billion. These totals would mark changes of +88.89% and +25.24%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for CHWY. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 242.07% higher. CHWY is currently a Zacks Rank #2 (Buy).

Looking at its valuation, CHWY is holding a Forward P/E ratio of 505.5. This represents a premium compared to its industry's average Forward P/E of 23.65.

We can also see that CHWY currently has a PEG ratio of 25.28. 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. Consumer Products - Staples stocks are, on average, holding a PEG ratio of 2.53 based on yesterday's closing prices.

The Consumer Products - Staples industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 175, which puts it in the bottom 32% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Zacks Investment Research