What's Going On With Chewy Stock?

Chewy, Inc. CHWY shares are trading lower Friday, though the stock remains up more than 60% over the past month. Here's a look at what's going on. 

What To Know:

Chewy shares spiked Thursday after Roaring Kitty posted an image of a cartoon dog on the social media platform X. The stock jumped after the post and trading was halted due to volatility. Chewy shares gave back the gains and ended Thursday’s session down 0.31%. 

Chewy's stock took off after the company reported strong first-quarter results and authorized a $500 million share repurchase program at the end of May. Following the print, Goldman Sachs raised its price target to $35 and highlighted Chewy’s operational improvements and accelerating revenue growth.

Chewy announced on Wednesday that it will repurchase and retire $500 million of its shares from its largest shareholder, in addition to the $500 million share repurchase program announced in May. 

Guggenheim maintained Chewy with a Buy rating Friday and raised the price target from $25 to $32. On Thursday, Wedbush analyst Seth Basham maintained an Outperform rating and raised the price target on Chewy from $28 to $35.

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Is CHWY A Good Stock To Buy?

When deciding whether to buy a stock, there are some key fundamentals investors may want to consider. One of these factors is revenue growth. Buying a stock is essentially a bet that the business will continue to grow and generate profits in the future.

Chewy has reported average annual revenue growth of 21% over the past 5 years. Looking forward, the company most recently said it expects FY24 revenues of $29.28 billion.

It's also important to pay attention to valuation when deciding whether to buy a stock. Chewy has a forward P/E ratio of 96.15. This means investors are paying $96.15 for each dollar of expected earnings in the future. The average forward P/E ratio of Chewy's peers is 20.48.

Other important metrics to look at include a company's profitability, balance sheet, performance relative to a benchmark index and valuation compared to peers. For in-depth analysis tools and important financial data, check out Benzinga PRO.

CHWY Price Action: According to Benzinga Pro, Chewy shares are down 8.85% at $26.48 at the time of publication Friday.

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