Is Chewy Stock Still a Buy After a 96% Jump in Six Months?

In This Article:

Key Takeaways

  • Chewy stock has increased nearly 100% in the past six months, and incredible performance.

  • The e-commerce company has outperformed the total subscription-based pet product industry, which rose 14.5%.

  • Register now to see our 7 Best Stocks for the Next 30 Days report - free today!

Chewy Inc. CHWY has experienced an extraordinary six months, with its stock surging 95.5%. Once viewed as a niche player, Chewy has now firmed its position as a dominant force in the pet-focused e-commerce space, benefiting from the growing demand for convenient, subscription-based pet products. While investors celebrate the company’s success, a pressing question remains: Does Chewy have more room to run, or is a correction on the horizon?

The stock has comfortably outpaced the industry’s modest rise of 14.5%. Chewy’s unmatched scale and operational capabilities have also helped it outperform the Retail-Wholesale sector and the S&P 500 index, which posted respective gains of 14.7% and 14.4%.

CHWY Stock Past Six-Month Performance

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Zacks Investment Research


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Chewy stock closed at $32.96 during yesterday’s trading session, sitting 15.7% below its 52-week high of $39.10, reached on June 27, 2024. CHWY also recently overtook the 50-day moving average. Let’s examine the factors behind this remarkable surge and brainstorm what potential investors’ next move should be in Chewy’s evolving story.

CHWY Trades Above 50 & 200-Day Moving Averages

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Zacks Investment Research


Image Source: Zacks Investment Research

Decoding Tailwinds Behind CHWY’s Impressive Run

Chewy’s impressive upward trajectory can be attributed to a combination of strong financial performance, strategic investments and favorable market trends. The company’s expanding customer base, recurring revenue model and diversified service offerings, including veterinary clinics and pharmacy services, provide a solid foundation for continued growth. Chewy’s ability to improve margins, invest in technology and generate robust free cash flow adds significant investor confidence in its long-term prospects.

The company is steadily adapting to changing market dynamics while prioritizing customer loyalty making it a strong contender in the burgeoning pet care market. 

A prime example of Chewy's focus on enhancing the customer experience is its innovative Autoship program, which saw a 5.8% year-over-year increase in sales during the second quarter of fiscal 2024, contributing a significant 78.4% of total net sales. This feature not only simplifies the purchasing process but also helps the company maintain a steady revenue stream, enabling it to tailor offerings based on preferences and needs. 

Chewy's strategic expansion into veterinary care has shown promising results. The company opened two additional Chewy Vet Care clinics, bringing the total to six locations at the end of the second quarter. These clinics not only enhance customer loyalty but also act as strategic entry points for new customers, embedding them into the Chewy ecosystem. This initiative has a positive impact on Net Sales Per Active Customer (“NSPAC”), which reached a new record of $565 in the second quarter, reflecting year-over-year growth of 6.2%.

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