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Bull of the Day: Chewy (CHWY)

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Chewy (CHWY - Free Report) operates as an online pet retailer, offering pet products that include dry and wet food, toys, mats, biscuits, vitamins, and supplements. The stock sports the highly-coveted Zacks Rank #1 (Strong Buy), with analysts raising their expectations across the board.

Zacks Investment Research
Image Source: Zacks Investment Research

In addition to favorable earnings estimate revisions, the stock resides in the Zacks Internet – Commerce industry, currently ranked in the top 24% of all Zacks industries. Let’s take a closer look at how the company currently stacks up.

 

Chewy Shares Soar Post-Earnings

Chewy’s latest set of quarterly results pleased investors, with shares soaring post-earnings thanks to an 88% year-over-year pop in EPS. Up 68% just over the last three months, shares have been red-hot, displaying notable outperformance.

Zacks Investment Research
Image Source: Zacks Investment Research

Operational efficiencies have aided CHWY’s profitability nicely, with earnings forecasted to jump nearly 40% in its current fiscal year (FY25). It’s worth noting that the company also recently announced a $500 million share repurchase program, which could help put in a floor for shares.

Chewy has seen margin expansion, further illustrated below. Please note that the chart is on a trailing twelve-month basis.

Zacks Investment Research
Image Source: Zacks Investment Research

Shares aren’t expensive given its forecasted growth, with the current 25.8X forward 12-month earnings multiple historically low. The current PEG ratio works out to 0.9X, reflecting that investors are paying a fair price for the forecasted growth.

 

Bottom Line

Investors can implement a stellar strategy to find expected winners by taking advantage of the Zacks Rank – one of the most powerful market tools that provides a massive edge.

The top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

Chewy (CHWY - Free Report) would be an excellent stock for investors to consider, as displayed by its Zack Rank #1 (Strong Buy).


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