Chewy (CHWY): A Fresh Upgrade Spurs Investor Interest—What’s the Stock’s True Value After Recent Strategic Moves?

If you have been watching Chewy (NYSE:CHWY) lately, this week’s jump in share price may have caught your eye. The latest catalyst? MoffettNathanson just upgraded Chewy to a “Buy,” pointing to its positioning to benefit as the U.S. pet market recovers. Investors cheered the new rating, with the stock rising 3.9% in a single afternoon session. Much of the excitement centers on Chewy’s strategic focus on adding customers and boosting recurring revenue, which some see as a promising formula for sustained growth rather than just a temporary lift.

This upside momentum adds to a dynamic year for Chewy. After stumbling post-earnings last quarter, the stock has powered through the noise, rising 32% over the past year and 17% since January. The past month has been a small retreat, but it does not erase the broader gains. Beyond analyst upgrades, Chewy has expanded its Chewy+ membership program, increased its product range with offerings like the ororo heated dog vest, and entered new markets, most recently Canada. These moves, along with a strong grip on online pet supply market share, have investors wondering if Chewy’s pivot to loyalty and steady business will drive it higher or if recent rallies have set a new normal.

If you have been waiting for the right moment with Chewy, the question now is whether this momentum is an entry point or if the market is already counting on even bigger things ahead.

Most Popular Narrative: 12.7% Undervalued

According to the most widely followed consensus, Chewy is trading at a significant discount to its estimated fair value based on expected future earnings growth and profitability improvements.

"Bullish analysts point to Chewy’s ongoing investments in growth and new categories as building blocks for future market share gains. Several cite these reinvestments as potentially expediting revenue upside in 2026 and beyond. The recent stock selloff is viewed by many as overdone, with risk/reward now skewed positively given the company’s resilient customer growth, strong execution, and expectations for improved results in the second half."

What is driving this optimistic price target? There is a secret sauce in the numbers: analysts are baking in runaway growth and a healthy profit trajectory, plus an investor-friendly multiple that rivals the hottest names in e-commerce. Want to peek behind the curtain of how Chewy’s future value is calculated? The full narrative breaks down the forecasts that have investors buzzing.

Result: Fair Value of $45.45 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if customer growth slows or there are disruptions to Chewy’s recurring Autoship program, these optimistic expectations could be quickly challenged and revenue stability could be affected.

Find out about the key risks to this Chewy narrative.

Another View: Market-Based Comparison Tells a Different Story

Looking beyond growth forecasts, a market-based comparison shows Chewy trading well above what is typical for its industry. This challenges the argument for undervaluation based on future earnings and raises the stakes for ongoing outperformance. Which view will the market reward?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Chewy to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Chewy Narrative

If you think the story deserves a different spin or want to dig into the numbers on your own terms, you can shape your own take in just a few minutes. Do it your way

A great starting point for your Chewy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for More Investment Ideas?

Smart investors always scan the horizon for fresh opportunities. Don’t miss your chance to find unique, high-potential stocks before everyone else does. Your next top performer is just a click away.

• Unlock value by tracking companies that stand out as undervalued stocks based on cash flows. Strong financials and fair pricing could set up your next winning move.
• Target growth with a focus on healthcare AI stocks, leading innovation in medicine and artificial intelligence and revolutionizing how we approach progress in the health sector.
• Boost your income by choosing from dividend stocks with yields > 3%. These selections consistently deliver yields above 3%, helping to strengthen your portfolio with reliable cash flow.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com