Chewy (CHWY): Evaluating Valuation After Chewy+ Membership Price Hike and Upbeat Analyst Upgrades

Chewy (CHWY) is making headlines after announcing a price increase for its Chewy+ membership by moving the annual fee from $49 to $79. Management signals strong confidence in its subscription model and future revenue potential with this move.

See our latest analysis for Chewy.

Chewy’s latest move to boost its Chewy+ membership fee comes as the stock trades at $33.7, with some bumpy trading. The stock is down 11.9% over the last month but has posted a solid 9.9% total shareholder return in the past year. Short-term momentum has faded; however, fresh analyst upgrades and positive management moves point to renewed enthusiasm about growth potential, especially as the company leans into its subscription model and captures more value from loyal customers.

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But with shares trading nearly 45 percent below some analyst price targets and Chewy reporting steady growth, investors might wonder if there is a buying opportunity here, or if the market is already factoring in future gains.

Most Popular Narrative: 25.9% Undervalued

Chewy’s widely accepted narrative suggests a fair value well above the latest close price, reflecting optimism around transformative new ventures and rising recurring revenues. Here is what’s driving that outlook, straight from the consensus:

Chewy's strategic expansions, such as opening new Chewy Vet Care Clinics, are expected to further penetrate the $25 billion vet services market, likely increasing revenue and active customer engagement in 2025 and beyond.

Read the complete narrative.

What is the real engine of this premium price? The consensus hinges on ambitious top-line targets and a projected profit profile that is more optimistic than sector norms. Want to see the exact assumptions underpinning this positive calculation? The narrative includes some bold earnings projections and market share increases you do not want to miss.

Result: Fair Value of $45.45 (UNDERVALUED)

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

However, reliance on Autoship subscriptions and slower than expected new customer growth remain key risks that could challenge Chewy’s upbeat narrative.

Find out about the key risks to this Chewy narrative.

Another View: What Do the Multiples Say?

Looking at Chewy through the lens of price-to-earnings, the stock trades at 92.5x. This is far above both industry peers (18.4x) and its own fair ratio of 26.8x. This notable gap could mean investors are paying up for future promise, not just today’s performance. Is the premium justified, or does it raise valuation risk?

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

Build Your Own Chewy Narrative

If you want to dig into the numbers yourself or challenge the consensus view, creating your own detailed narrative is quick and straightforward. Do it your way

A great starting point for your Chewy research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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