Chewy stock ‘is done going down’ – Jim Cramer says

By:
on May 29, 2024
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  • Chewy reported market-beating financial results for its Q1 today.
  • Jim Cramer only had good things to say about $CHWY on Wednesday.
  • Chewy stock is up more than 25% following its earnings release.

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Jim Cramer only had good things to say about Chewy Inc (NYSE: CHWY) at the “morning meeting” on Wednesday.

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Cramer shares his view on Chewy stock

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The pet food and products retailer came in ahead of Street estimates for its first quarter today on “healthy growth rates” in pet adoption.

$CHWY was down nearly 25% heading into Wednesday but its earnings report this morning brought confidence to the Mad Money host that it’s now “done going down”.

The New York listed firm earned 31 cents a share (adjusted) on $2.88 billion of net sales in its Q1. Analysts, in comparison, were at 20 cents per share and $2.85 billion, respectively.

You can read the company’s full earnings release on this link. Chewy stock is now trading just below the price at which it started 2024.

Why else is Jim Cramer bullish on $CHWY?

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Jim Cramer took a bullish tone on Chewy stock also because its board announced a $500 million share repurchase programme on Wednesday.

That’s a positive since stock buybacks tend to signal management’s confidence in what the future holds for the company. On CNBC, the famed investor also said this morning:

We’re done going down because they are moving into health care. They did the pivot to profitability. They are very good guys. I’m really glad to see them win.

On Wednesday, Nicholas Jones – a JMP Securities analyst also reiterated his “buy” rating on Chewy stock and said the $9.0 billion company based out of Florida, United States has upside to $26 which translates to up another 22% from here.

Chewy stock is up on upbeat future guidance

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Shares of Chewy Inc are attractive to own at writing also because the retail firm raised its full-year guidance for EBITDA margin (adjusted) to up to 4.3% today versus about 3.8% previously.

Sumit Singh – chief executive of the pet products company also confirmed that the balance between adoption and relinquishment was positive for the first time since 2022 in Q1. He added:

While it is premature to declare an industry turnaround, we maintain our perspective that the pet industry is on track towards normalization.

$CHWY is in the green on Wednesday also because it forecast up to $2.86 billion in net sales for its current financial quarter which was roughly in line with Street estimates. Chewy stock does not, however, pay a dividend at writing.

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