Chewie New York Stock Exchange: WH The stock price fell following the release of its third-quarter 2025 earnings report, which opened up a buying opportunity on the dip. The results were mixed compared to analysts’ expectations, but were in line with pet industry trends and strong growth prospects. Trends include a decline in active users by another quarter compared to the previous year, but suggest that active users will soon return to growth and maintain growth over the next few years.
Chewie today
(As of 12/06/2024 ET)
- 52 week range
- $14.69
▼
$39.10
- P/E ratio
- 34.70
- Target price
- $34.15
The main reason for the decline in the number of users is the post-pandemic normalization, which has almost come to an end. The decline in the third quarter is only 0.5%, offset by other indicators that show increased leverage should macroeconomic headwinds ease. This is expected in 2025, when interest rates drop and Trump’s economic policies begin to take effect. Important details of the report include sequential increases in user numbers, increases in revenue per user, and a high level of recurring revenue (77%). Autoship’s metrics show recurring revenue is visible and growing, providing a solid foundation on which the e-commerce retailer’s growth can accelerate as user numbers improve and macro headwinds ease.
Chewy falls, missing analysts’ high expectations
Chewy had a mixed quarter compared to analyst consensus estimates published by MarketBeat. However, it was a strong quarter, with growth in line with industry trends as economic headwinds offset market share gains. The company reported net sales of $2.88 billion, up 4.8% year-over-year, beating consensus estimates by nearly 100 basis points. The growth was driven by a 4.2% increase in revenue per user, offset by a slight decrease in active users of 0.5%. Auto sales grew 8.7% and are expected to continue to lead the business in 2025.
Chewy Stock Forecast Today
$34.15
Growth potential 8.14%Moderate purchase
Based on ratings from 23 analysts
| High forecast | $42.00 |
|---|---|
| Average forecast | $34.15 |
| Low forecast | US$20.00 |
Chewy Stock Forecast Details
The margin news is good, even though earnings miss consensus. The company expanded its margins at the gross and operating levels, achieved GAAP profitability and increased adjusted earnings per share by 33%. Adjusted earnings per share of $0.20 missed consensus by $0.03, but the revision set the bar high and the miss was offset by guidance. Chewy raised its fourth-quarter and full-year guidance to above-consensus levels, enough to support analyst sentiment if not lead to an improvement.
Analyst sentiment trends are positive at the end of 2024 after reverting to negative at the start of the year. The consensus target has increased nearly 1,500 basis points since early fall, pushing the market into the upper range of around $40. Moving to consensus corresponds to 7.5% of critical target support, and moving to the upper range approaches 32.5% of critical support.
Institutional activity could limit growth in gummy stocks
Institutional activity in the fourth quarter is negative for CHWY stock and could limit growth when the stock price rises. However, activity in 2024 is generally bullish and in line with the uptrend in the market that began in May. Falling share prices create opportunity for group and retail investors; the question is whether they will resume procurement activities. If this is the case, CHWY’s share price should soon begin to recover. Otherwise, it could fall below the critical support target level around $30.50.
The price movement gives reason for optimism. The market fell in response to the news, but rebounded from a critical support target and showed signs of recovery. Signs of recovery include increased volume, which doubled the daily average in the first two hours of trading. The uptrend in stock prices should continue, assuming support holds at $30.50. Otherwise, this stock could fall to $28.50 or lower before hitting a hard bottom.
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