Chewy (CHWY) Stock Forecast & Price Target

Chewy's positive outlook is supported by notable growth metrics, including an increase in active customers to 20.9 million, with a quarterly growth of approximately 150,000, surpassing consensus expectations. The company's net sales per active customer (NSPAC) improved by 5% year-over-year, reaching $591, complemented by significant gains in autoship sales, which rose by 15% year-over-year. Furthermore, management has raised revenue projections for fiscal year 2024 to a range of $12.50 billion to $12.60 billion, indicating a solid growth trajectory in line with ongoing consumer spending increases in the pet care industry.

Chewy, the largest e-commerce petcare retailer in the US, reported $11.9 billion in sales for fiscal 2024 but faces significant challenges that contribute to a negative outlook on its stock. Continued supply-chain volatility threatens to create gross margin pressure and missed revenue opportunities, potentially leading to permanent customer loss amidst a backdrop of increased competition and slowing e-commerce penetration in the pet category. Additionally, the current high investor sentiment may be misleading, as factors such as supply chain disruptions and a shift in consumer spending trends could adversely impact Chewy's future growth prospects.