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Chewy (CHWY) Sees a More Significant Dip Than Broader Market: Some Facts to Know

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Chewy (CHWY - Free Report) closed the most recent trading day at $17.37, moving -1.92% from the previous trading session. This change lagged the S&P 500's daily loss of 1.02%. Elsewhere, the Dow lost 1.04%, while the tech-heavy Nasdaq lost 1.65%.

The online pet store's shares have seen an increase of 4.61% over the last month, surpassing the Consumer Staples sector's loss of 1.15% and the S&P 500's gain of 3.64%.

The upcoming earnings release of Chewy will be of great interest to investors. The company's earnings report is expected on March 20, 2024. The company's upcoming EPS is projected at $0.10, signifying a 37.5% drop compared to the same quarter of the previous year. Meanwhile, the latest consensus estimate predicts the revenue to be $2.81 billion, indicating a 3.69% increase compared to the same quarter of the previous year.

Investors should also pay attention to any latest changes in analyst estimates for Chewy. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Right now, Chewy possesses a Zacks Rank of #1 (Strong Buy).

In terms of valuation, Chewy is currently trading at a Forward P/E ratio of 25.04. Its industry sports an average Forward P/E of 18.08, so one might conclude that Chewy is trading at a premium comparatively.

Investors should also note that CHWY has a PEG ratio of 1.1 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Consumer Products - Staples industry stood at 1.77 at the close of the market yesterday.

The Consumer Products - Staples industry is part of the Consumer Staples sector. With its current Zacks Industry Rank of 146, this industry ranks in the bottom 43% of all industries, numbering over 250.

The Zacks Industry Rank gauges the strength of our 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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