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Chewy (CHWY) Gains As Market Dips: What You Should Know

Chewy (CHWY) closed at $70.42 in the latest trading session, marking a +0.3% move from the prior day. This change outpaced the S&P 500's 0.85% loss on the day.

Prior to today's trading, shares of the online pet store had lost 11.1% over the past month. This has lagged the Consumer Staples sector's gain of 2.05% and the S&P 500's loss of 0.41% in that time.

CHWY will be looking to display strength as it nears its next earnings release. In that report, analysts expect CHWY to post earnings of $0.03 per share. This would mark year-over-year growth of 125%. Meanwhile, our latest consensus estimate is calling for revenue of $2.12 billion, up 31.03% from the prior-year quarter.

CHWY's full-year Zacks Consensus Estimates are calling for earnings of $0.20 per share and revenue of $8.95 billion. These results would represent year-over-year changes of +122.22% and +25.24%, respectively.

Any recent changes to analyst estimates for CHWY should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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 has moved 18.38% higher within the past month. CHWY currently has a Zacks Rank of #2 (Buy).

Looking at its valuation, CHWY is holding a Forward P/E ratio of 348.87. Its industry sports an average Forward P/E of 18.04, so we one might conclude that CHWY is trading at a premium comparatively.

Also, we should mention that CHWY has a PEG ratio of 17.44. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CHWY's industry had an average PEG ratio of 2.37 as of yesterday's close.

The Consumer Products - Staples industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 236, which puts it in the bottom 8% of all 250+ industries.

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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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