Chewy Inc (CHWY, Financial), a leading player in the retail-cyclical sector, has demonstrated a remarkable stock performance recently. Over the past week, the company's stock price has seen an 8.15% gain, and an even more impressive 53.35% gain over the past three months. Currently, Chewy boasts a market capitalization of $11.22 billion. According to GuruFocus, the stock is significantly undervalued with a current GF Value of $42.49, down from $44.87 three months ago, suggesting a potential for further growth.
Overview of Chewy Inc
Founded in 2011 and later acquired by PetSmart in 2017, Chewy Inc stands as the largest e-commerce pet care retailer in the US. The company went public in 2019 and has since continued to expand its market presence. In 2023, Chewy generated $11.2 billion in sales, offering a wide range of products including pet food, treats, pharmacy items, and hard goods like crates and leashes. This extensive product range has solidified Chewy's position as a comprehensive provider for pet owners.
Assessing Chewy's Profitability
Chewy's Profitability Rank stands at 5/10, indicating moderate profitability within the industry. The company's Operating Margin is currently at 0.15%, which is better than 29.87% of its peers. Notably, Chewy's Return on Equity (ROE) is an impressive 19.22%, outperforming 80.57% of its competitors. Additionally, the Return on Assets (ROA) and Return on Invested Capital (ROIC) are 2.82% and 1.31% respectively, both metrics showcasing Chewy's ability to generate earnings relative to its assets and invested capital.
Growth Trajectory of Chewy
Chewy's Growth Rank is a robust 7/10, reflecting strong growth metrics. The company has achieved a 13.70% 3-Year Revenue Growth Rate per Share, surpassing 69.11% of its industry counterparts. Over a 5-year period, this growth rate accelerates to 23.90%, outperforming 89.6% of competitors. Looking ahead, Chewy's estimated future revenue growth rate for the next 3 to 5 years is 5.94%, which is better than 43.35% of the companies in its sector. Furthermore, the 3-Year EPS Growth Rate stands at an impressive 97.20%, superior to 94.7% of its peers.
Investor Confidence and Market Position
Chewy's stock is held by notable investors including Baillie Gifford (Trades, Portfolio), which owns 19,333,073 shares, representing 4.44% of shares. Other significant holders include Renaissance Technologies (Trades, Portfolio) and Paul Tudor Jones (Trades, Portfolio), holding 0.58% and 0.13% of shares respectively. This investor confidence is bolstered by Chewy's competitive edge over its peers such as Vipshop Holdings Ltd (VIPS, Financial), Etsy Inc (ETSY, Financial), and Maplebear Inc (CART, Financial), which have lower market caps of $7.47 billion, $6.17 billion, and $8.5 billion respectively.
Conclusion: A Promising Outlook for Chewy Inc
In conclusion, Chewy Inc's strong market position and growth prospects are evident from its recent stock performance and financial metrics. The company's profitability and operational efficiency, coupled with its superior growth metrics, make it a standout in the retail-cyclical sector. When compared to its competitors, Chewy's robust market cap and investor confidence highlight its potential for future growth, making it an attractive option for investors looking for value and growth in the e-commerce space.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
