Chewy, Inc.: Relative Weakness Presents a Buying Opportunity

Chewy, Inc. is a pet e-commerce retailer that offers a range of pet food, supplies, medication, and insurance. The company went public in 2019 and was later spun off from PetSmart. As of September 25, 2025, Chewy's stock price is $37.98. Argus recommends Chewy as a buying opportunity due to its relative weakness.

Chewy Inc. (CHWY), the largest e-commerce petcare retailer in the United States, has seen a significant upgrade in its stock rating by MoffettNathanson. The analyst firm raised its rating from 'Neutral' to 'Buy' on September 25, 2025, and set a new price target of $48.00 USD. This move reflects a positive shift in sentiment from the analyst community, with other financial institutions maintaining support for the company despite recent adjustments in price targets.

Chewy Inc. operates within the Consumer Cyclical sector and the Retail - Cyclical industry, with a market capitalization of approximately $15.79 billion. The company generated $11.9 billion in fiscal 2024 sales across pet food, treats, hard goods, and pharmacy categories. Founded in 2011, Chewy was acquired by PetSmart in 2017 and went public as a stand-alone company in 2019. The firm's financial performance is underscored by its revenue growth of 8.6% over the past three years, reflecting its ability to expand in a competitive market.

The upgrade by MoffettNathanson comes amidst a positive outlook for the pet care industry, with the firm anticipating a 1% annual rise in pet-owning households through 2027. This trend positions Chewy Inc. for significant market capture. Despite a competitive landscape, the company is expected to maintain its appeal to pet owners, promising robust long-term economic prospects.

Chewy Inc. has been executing a comprehensive subscription-first transformation strategy through its Autoship program, Chewy+ membership platform, and vertical integration into healthcare services. The company's Autoship subscription service accounted for 83% of net sales in Q2 2025, while the Chewy+ paid membership delivers enhanced customer benefits. The veterinary care services segment aims to target 20 clinic locations by year-end. These initiatives have contributed to record Autoship sales of $2.58 billion with growth rates outpacing total revenue at nearly 15%.

The company's financial health is supported by a Piotroski F-Score of 7, indicating a healthy situation. However, sector-specific risks, such as competition and market saturation, remain pertinent. The company's beta of 2.33 suggests high volatility, which investors should consider. Upcoming catalysts, including earnings reports, may influence future performance.

Based on the one-year price targets offered by 23 analysts, the average target price for Chewy Inc. (CHWY) is $43.93 with a high estimate of $52.00 and a low estimate of $27.00. The average target implies an upside of 17.45% from the current price of $37.40. The consensus recommendation from 31 brokerage firms is currently 2.0, indicating an "Outperform" status. GuruFocus estimates the GF Value for Chewy Inc. (CHWY) in one year to be $39.71, suggesting an upside of 6.18% from the current price of $37.4.

Chewy Inc. (CHWY) stock is currently trading at $37.98, reflecting a premium valuation compared to historical ranges. The company's P/E ratio of 108.77, P/S ratio of 1.32, and P/B ratio of 40.5 further emphasize its high valuation. Despite this, the company's robust financial performance and strategic execution position it as a strong buy opportunity for investors.