Chewy (CHWY) Stock Drops Despite Market Gains: Important Facts to Note

Chewy (CHWY) closed the most recent trading day at $25.51, moving -4.96% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.78%. Elsewhere, the Dow gained 0.49%, while the tech-heavy Nasdaq added 1.29%.

The stock of online pet store has fallen by 0.92% in the past month, leading the Retail-Wholesale sector's loss of 6.17% and the S&P 500's loss of 1.33%.

Investors will be eagerly watching for the performance of Chewy in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on March 25, 2026. On that day, Chewy is projected to report earnings of $0.28 per share, which would represent no growth from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $3.26 billion, indicating a 0.27% increase compared to the same quarter of the previous year.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.28 per share and a revenue of $12.6 billion, representing changes of +23.08% and +6.21%, respectively, from the prior year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Chewy. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the 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.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. At present, Chewy boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Chewy is currently exchanging hands at a Forward P/E ratio of 17.14. This denotes a premium relative to the industry average Forward P/E of 15.45.

Also, we should mention that CHWY has a PEG ratio of 0.93. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Internet - Commerce industry had an average PEG ratio of 0.93 as trading concluded yesterday.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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