7. Chewy Inc. (NYSE:CHWY)
Average Price Target Upside Potential According to Analysts: 23.64%
Number of Hedge Fund Holders: 33
Chewy Inc. (NYSE:CHWY) is an American online pet supply retailer that offers a wide range of products, including food, toys, and medicine. The company partners with around 3,500 trusted brands and also has its own private-label products. With about 115,000 products and services available through its websites and mobile apps, Chewy Inc. (NYSE:CHWY) makes it easy for pet owners to find everything they need. The company also offers a subscription service through its Autoship program that allows customers to set up regular deliveries of pet supplies.
In the second quarter of 2024, Chewy Inc. (NYSE:CHWY) reported net sales of $2.86 billion, which is a 2.6% increase from the same quarter last year. Basic earnings per share rose significantly to $0.70, an increase of $0.65 year-over-year. The Autoship program continues to be a strong performer. Autoship customer sales increased by around 6% and accounted for 78% of total sales. This reflects the program’s popularity and the strength of Chewy’s (NYSE:CHWY) essential product categories, such as consumables and pet health products.
The company is also seeing positive trends in customer engagement. Chewy Inc. (NYSE:CHWY) achieved a record net sales per active customer of $565 in Q2 2024. Additionally, the company has been redesigning its mobile app to make the overall user experience more convenient. In the second quarter of 2024, unique customers who placed orders through the company’s mobile app increased by about 13% year-over-year, with overall mobile app orders increasing approximately 15% year-over-year.
Furthermore, Chewy Inc. (NYSE:CHWY) has expanded its veterinary services by opening two new Vet Care clinics in Denver and South Florida. This expansion aligns with the company’s goal to enhance customer care and support pet health.
With strong financial performance and ongoing improvements in customer engagement, Chewy Inc. (NYSE:CHWY) presents a compelling investment opportunity in the pet industry. The company’s focus on convenience and quality positions it well for future growth.
Analysts have a positive outlook on CHWY. The 12-month median price target set by analysts indicates a potential increase of 23% from the stock’s current price.
As of the second quarter of 2024, Chewy Inc. (NYSE:CHWY) was held by 33 hedge funds, according to Insider Monkey’s database. Meridian Funds stated the following regarding Chewy Inc. (NYSE:CHWY) in its “Meridian Growth Fund” Q2 2024 investor letter:
“Chewy Inc. (NYSE:CHWY) is an online provider of pet food, supplies, and medications. The company’s stock soared during COVID while customers accelerated online purchases and added pets to their families. Following a post-COVID correction, we re-established a position during the quarter at what we believe to be an attractive price. With nearly 80% of revenues recurring—a rarity for an online business—we believe Chewy is well-positioned to activate and grow its customer base. In addition, we can see its pharmacy business starting to improve net sales and margins per active customer and have high confidence in its new CFO. Both, in our view, could add significant value. The stock gained during the period as higher net sales per active customer increased almost 10%.”
