Chewy (CHWY) Stock Forecast & Price Target

Chewy is viewed positively because it combines a large and resilient core e-commerce franchise with meaningful upside from higher-margin adjacencies, anchored by autoship subscriptions that drive over 83% of sales and support strong customer repeat behavior. Its leadership in pet retail is being reinforced by broad-based growth across categories, including 20.8% growth in Other revenue, 14.4% growth in Hardgoods, and 14.0% growth in Pet Health & Specialty Products, while the pet health platform is scaling from a $3.3BN revenue base in FY23 with clinics delivering triple-digit year-over-year growth and a redesigned Chewy+ expected to improve product-market fit. The company also appears capable of compounding profitability and shareholder returns, with EBITDA forecast to rise from $916MM in FY26 to $1.86BN in FY31, SG&A improving to 18.4% of revenue, full-year free cash flow conversion guided to about 80% of EBITDA, and continued buybacks alongside strategic investment in advertising, veterinary services, and the broader Chewy ecosystem.

Chewy is viewed negatively because its core business is still constrained by a challenging consumer backdrop, with management acknowledging no recovery at the midpoint and only modest 2Q26 revenue growth of 7.3% to $3.33BN despite 21.7M active customers and autoship already representing over 83% of sales. Although EBITDA reached $226.7MM and a 6.8% margin, the outperformance was largely driven by one-time items such as tariff rebates and gift card breakage, while management expects gross margin to contract sequentially in 3Q and only modestly expand for FY26, underscoring limited underlying operating momentum. The outlook is also pressured by soft demand in treats and toppers, weakening dog adoption, rising vendor concentration, and execution risk as Chewy’s newer higher-margin initiatives in ads, veterinary software, and clinics remain too small to offset slower-growth core retail and intensifying competition from larger e-commerce players.