Can Chewy’s (CHWY) Bullish Earnings Outlook Reinforce Its Competitive Position in Pet Retail?

• Chewy is set to report quarterly earnings, with analysts anticipating an earnings per share of US$0.33, reflecting a 37.5% increase compared to the same period last year.
• This heightened expectation, supported by positive analyst sentiment and an elevated Zacks Rank position, highlights growing optimism about Chewy’s near-term financial performance.
• We'll examine how the anticipated strong year-over-year earnings growth influences Chewy's overall investment narrative.

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Chewy Investment Narrative Recap

To be a Chewy shareholder, you need to believe in the long-term growth of pet e-commerce, Chewy’s ability to expand beyond Autoship, and continued customer and margin growth. The anticipated jump in earnings per share this quarter is shining a spotlight on profitability, but doesn’t substantially reduce concerns over the risk of slow customer acquisition, which remains an ongoing test for the business.

The recently announced $100 million share repurchase program stands out this quarter, as it could reinforce confidence during periods of earnings volatility and growing expectations for margin expansion. The buyback's timing, amid heightened analyst optimism, connects directly to Chewy's near-term financial catalysts and the aim of delivering value to existing shareholders.

Yet, just as optimism builds on strong earnings momentum, investors should also factor in Chewy’s high reliance on Autoship for revenue stability...

Read the full narrative on Chewy (it's free!)

Chewy's narrative projects $15.1 billion revenue and $466.3 million earnings by 2028. This requires 7.7% yearly revenue growth and a $78.1 million earnings increase from $388.2 million today.

Uncover how Chewy's forecasts yield a $46.10 fair value, a 17% upside to its current price.

Exploring Other Perspectives

Fair value opinions from the Simply Wall St Community range from US$30 to over US$60 per share, based on nine different valuations. While many expect margin expansion to continue fueling earnings, these varied forecasts remind you how widely investor views can differ when it comes to Chewy’s future.

Explore 9 other fair value estimates on Chewy - why the stock might be worth as much as 54% more than the current price!

Build Your Own Chewy Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Chewy research is our analysis highlighting 3 key rewards that could impact your investment decision.
• Our free Chewy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Chewy's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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