CHEWY SHARES YES/NO?
1. Chewy as a growth stock with volatile results in 2024
-$CHWY is experiencing volatility due to expected lower pet spending.
- The stock has recovered due to positive results and the influence of investor Keith Gill.
- Shares are up more than 35% this year but have lost 18% from the June high.
2. Chewy's strong recurring business model
- 78.4% of revenue comes from Autoship, which provides recurring revenue.
- Autoship contributes to revenue stability and increases customer loyalty.
- Revenue per customer increased by 6.2%.
3. Decline in growth due to the post-pandemic downturn
- Pet ownership stabilizes after the pandemic boom.
-$CHWY expects a return to normal trends in 2025.
- The company benefits from non-discounted sales, which account for 85% of revenues.
4. Increasing margins as key to future earnings growth
-$CHWY is increasing margins through sponsored ads and the pharmacy segment.
- Pharmacy services have higher margins than retail sales.
-$CHWY focuses on private brands with higher margins than national brands.
5. Chewy reduces operating costs and increases efficiency
- The company has a high fixed cost infrastructure.
- As a result, it has operating leverage that helps increase profits.
6. Second-quarter achievements due to margin expansion
- Gross margin increased 120 basis points to 29.5%.
- Adjusted EBITDA margin increased from 3.2% to 5.1%.
- Adjusted EBITDA margin increased 65% on a 2.6% increase in sales.
7. Attractive valuation of Chewy shares
- The stock is trading at a forward P/E of around 26.
- Despite relatively slow revenue growth, the potential is high due to margin expansion.
- The valuation is lower than Walmart, but $CHWY is growing faster.
Well, if it was as you write, the company could start to do well and now might be a good time to buy.
Well honestly I'm not interested at all and I don't think $WMT is very interesting either.
This sector is quite volatile and the performance of this stock confirms that volatility.
It doesn't look very appealing so far. If the fundamentals change, it could be more interesting.
Not bad, but I'd rather just buy $WMT.
Collectivity is still very much in its infancy. If someone likes it, it may not be a bad thing. Earnings per share should gradually increase, and that increase could start as early as next year. Margins are still low, but if they keep increasing, it will be nice.
Collectivity is still very much in its infancy. If someone likes you, that's not necessarily a bad thing. Earnings per share should gradually increase, and that increase could start as early as next year. Margins are still low, but if they keep increasing, it will be nice.