Chewy (NYSE:CHWY) Shares Gap Up – Time to Buy?

Chewy (NYSE:CHWY)’s share price gapped up prior to trading on Wednesday . The stock had previously closed at $23.45, but opened at $25.96. Chewy shares last traded at $26.1540, with a volume of 8,142,916 shares traded.

Chewy News Roundup

Here are the key news stories impacting Chewy this week:

• Positive Sentiment: Company results and outlook: Chewy reported full‑year sales of $12.6B (normalized +8.3%) and Q4 revenue of $3.26B, highlighted “record profitability” and issued an upbeat outlook that pushed investors toward the stock. Read More.
• Positive Sentiment: Margin roadmap & earnings call color: management emphasized margin expansion and improving EBITDA conversion (details in the call/transcript), which traders view as a path to sustainable profits. Read More.
• Positive Sentiment: Market reaction / trading flows: premarket and open trading showed large gains as event‑driven positioning, options activity and short covering magnified the move into the print. Read More.
• Neutral Sentiment: Quarterly metrics were mixed-to-in‑line: adjusted EPS came in roughly flat at $0.27 (consensus ~ $0.28) and revenue was essentially in line with estimates, so the stock move appears driven more by the outlook and margins than a large beats. Read More.
• Neutral Sentiment: Options/volume signals: the name saw unusual options volume and heavy put/call flows earlier in the week, which can both amplify volatility around earnings. Read More.
• Negative Sentiment: Insider and institutional selling: recent filings show multiple insider sales and large institutional reductions in the latest quarter, a potential longer‑term headwind for sentiment. Read More.
• Negative Sentiment: Prior weakness and valuation risk: the stock entered the print coming off multi‑month weakness (52‑week lows) and still trades with a relatively high beta and stretched expectations vs. near‑term growth, leaving it sensitive to execution or guidance misses. Read More.

Analysts Set New Price Targets

A number of research firms have recently commented on CHWY. The Goldman Sachs Group raised their target price on Chewy from $44.00 to $52.00 and gave the company a “buy” rating in a research report on Thursday, December 11th. UBS Group set a $51.00 price target on Chewy in a research report on Tuesday, January 13th. Morgan Stanley dropped their price objective on Chewy from $51.00 to $50.00 and set an “overweight” rating on the stock in a report on Tuesday, March 10th. Wedbush set a $42.00 price objective on Chewy and gave the company an “outperform” rating in a research report on Wednesday, December 10th. Finally, Weiss Ratings reaffirmed a “hold (c)” rating on shares of Chewy in a research note on Wednesday, January 21st. Seventeen research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company. Based on data from MarketBeat, the company has an average rating of “Moderate Buy” and a consensus target price of $45.55.

Chewy Stock Performance

The firm has a market capitalization of $10.92 billion, a PE ratio of 54.84, a price-to-earnings-growth ratio of 1.60 and a beta of 1.60. The stock’s 50 day simple moving average is $27.30 and its two-hundred day simple moving average is $32.38.

Chewy (NYSE:CHWY) last posted its quarterly earnings results on Wednesday, March 25th. The company reported $0.27 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.28 by ($0.01). Chewy had a net margin of 1.64% and a return on equity of 56.78%. The company had revenue of $3.26 billion during the quarter, compared to analysts’ expectations of $3.26 billion. During the same quarter last year, the company earned $0.28 earnings per share. Chewy’s revenue for the quarter was up .5% on a year-over-year basis. Equities research analysts expect that Chewy will post 0.24 earnings per share for the current fiscal year.

Insider Transactions at Chewy

In other Chewy news, CTO Satish Mehta sold 13,013 shares of the firm’s stock in a transaction on Monday, February 2nd. The stock was sold at an average price of $28.99, for a total value of $377,246.87. Following the completion of the sale, the chief technology officer directly owned 273,835 shares of the company’s stock, valued at $7,938,476.65. This trade represents a 4.54% decrease in their position. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 0.43% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently modified their holdings of the company. Quent Capital LLC acquired a new stake in Chewy during the third quarter worth about $27,000. CoreCap Advisors LLC increased its holdings in shares of Chewy by 306.3% during the 4th quarter. CoreCap Advisors LLC now owns 845 shares of the company’s stock worth $28,000 after buying an additional 637 shares during the last quarter. Harbour Investments Inc. raised its position in shares of Chewy by 81.4% during the 4th quarter. Harbour Investments Inc. now owns 907 shares of the company’s stock valued at $30,000 after buying an additional 407 shares during the period. Osterweis Capital Management Inc. purchased a new stake in shares of Chewy during the 2nd quarter valued at approximately $30,000. Finally, Los Angeles Capital Management LLC acquired a new position in Chewy in the fourth quarter valued at approximately $31,000. Institutional investors and hedge funds own 93.09% of the company’s stock.

Chewy Company Profile

Chewy, Inc (NYSE: CHWY) is a leading e-commerce retailer specializing in pet food, supplies and services. The company offers a comprehensive assortment of products for dogs, cats, fish, birds and other small animals, including prescription medications, veterinary health products, grooming essentials and toys. Through its online platform and mobile app, Chewy provides an intuitive shopping experience with features such as Autoship, ensuring regular deliveries of pet essentials at schedule intervals.

Founded in 2011 by Ryan Cohen and Michael Day, Chewy initially operated under the name Mr.