Chewy stock price analysis and earnings preview

Chewy stock price remains in a technical bear market after falling by 50% from its highest point in June last year.

It has slumped to its lowest level since July 2024 as investors focus on the upcoming earnings, which will provide more information about its business.

Chewy stock pressured ahead of earnings 

Chewy, a top online retailer focusing on pet supplies, has fallen sharply in the past few months as investors worry about its revenue growth.

These concerns will be put to the test next week when the company publishes its financial results.

Based on the recent earnings, analysts expect that the results will show that its revenue growth stalled in the last quarter.

The average estimate is that its quarterly revenue was $3.5 billion in the last quarter, flat what it made in the same period a year earlier.

Its earnings-per-share (EPS) is expected to remain unchanged at $0.28.

Chewy’s revenue and profitability will likely be better than these estimates as the company tends to be highly conservative when making its guidance. 

However, on the positive side, analysts are optimistic that the company’s annual revenue in FY26 will be $12.6 billion, up by 6.25% YoY. It will then make $13.59 billion in the next financial year, up by 7.85% YoY. 

These numbers mean that the company’s growth has continued, as its annual revenue stood at $10.1 billion in FY22.

Most notably, the growth is being driven by the autoship solution, which made over $10.3 billion in the last financial year.

Analysts are moderately bullish on the Chewy stock. In a recent note, analysts at Raymond James said that the recent pullback made it an attractive buying point. 

They pointed to its cheap valuation, including its 8x enterprise value to next year's EBITDA.

Also, the analyst pointed to the fact that Chewy was a highly defensive company, especially as the number of pets in the United States jumped.

Seeking Alpha data shows that the company has a forward PE ratio of 19, slightly higher than its sector median of 15.

Also, its price-to-cash flow is 14, which is much lower than that of other companies in the industry.

Most analysts have a bullish outlook for the stock, with the average estimate among analysts being $43.8, up sharply from the current level.

CHWY stock price technical analysis 

Chewy stock chart | Source: TradingView 

Technical analysis suggests that CHWY stock has slumped in the past few months, falling from a high of $48.12 in June last year to the current $24.30.

It has dropped below the Major S&R pivot point of the Murrey Math Lines tool at $25.

The stock crossed the 50-week Exponential Moving Average (EMA), while the Awesome Oscillator turned negative in October last year.

Also, the Trend Strength Index is nearing the oversold level.

Therefore, the stock will likely continue falling, potentially to the key support level at $14.65, its lowest level in May 2024. This target is about 40% below the current level.

However, a move above the key psychological level at $30 will invalidate the bearish outlook and point to more gains, potentially to $48, its highest point in June last year.