We recently compiled a list of the 8 Best Pet Stocks to Buy According to Billionaires. In this article, we are going to take a look at where Chewy, Inc. (NYSE:CHWY) stands against the other pet stocks.
The pet industry is expected to continue growing in the coming years, driven by changing consumer preferences and innovative trends. This growth is supported by increasing pet ownership, particularly among millennials, who see pets as family members and are ready to invest in premium pet care. According to the 2024 APPA National Pet Owners Survey, 82 million US households own a pet. This shows how common pet ownership is becoming across the country. Millennials make up 32% of all pet owners.
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The rise of premium supplements is another key factor expected to drive growth. This aligns with the trend of the “humanization of pets,” where pet parents seek nutritious and healthy solutions for their animals. As a result, there is a growing demand for sustainable and organic pet products.
These trends highlight a deep emotional connection between pets and pet parents, which is driving innovation and spending in the industry.
According to the American Pet Products Association (APPA), US pet industry sales are projected to reach $150.6 billion in 2024. Pet food is expected to remain the largest segment, with spending rising to $66.9 billion. Other major segments include Supplies, Live Animals, and Over-the-counter (OTC) Medicine at $32 billion, as well as Veterinary Care and Product Sales projected to reach $39.1 billion. These segments offer significant opportunities for companies involved in pet care products and services.
Methodology
To compile our list of the 8 best pet stocks to buy according to billionaires, we looked for the largest pet companies. We reviewed our own rankings, financial media reports, ETFs, and various online resources to compile a list of the best pet stocks. Next, we focused on the top 8 pet stocks most favored by billionaires. Data for the number of billionaire investors for each stock was taken from Insider Monkey’s Q4 2024 database. Finally, the 8 best pet stocks to buy were ranked in ascending order based on the number of billionaires holding stakes in them as of Q4 2024.
Additionally, we mentioned the hedge fund sentiment surrounding each stock, which was taken from Insider Monkey’s Q4 2024 database of more than 1,000 elite hedge funds.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up shot of a store shelf stocked with pet food and supplies.
Chewy, Inc. (NYSE:CHWY)
Number of Billionaire Investors: 11
Number of Hedge Fund Holders: 48
Chewy, Inc. (NYSE:CHWY) is an American pet company that operates as an online retailer of pet food and treats, pet supplies, pet care, and other pet-related products. The company serves the contiguous United States and has expanded to Southern Ontario in Canada as well. Chewy, Inc. (NYSE:CHWY) ranks among the best pet stocks to buy.
On March 20, TD Cowen analyst William Kerr reiterated a “Buy” rating for Chewy, Inc. (NYSE:CHWY) with a price target of $45. The firm’s analyst highlighted the company’s strong financial outlook ahead of its Q4 2024 earnings. Kerr expects Chewy, Inc. (NYSE:CHWY) to report Q4 2024 revenues of approximately $3.2 billion, which would represent a 13% year-over-year growth. This growth is expected to be driven by strong Autoship sales. Through the Autoship subscription program, Chewy, Inc. (NYSE:CHWY) allows customers to set up automatic recurring orders for their preferred pet supplies, which ensures recurring sales. Kerr also predicts an improvement in gross margin to 29.3%, up from 28.2% in the fourth quarter of the previous year, supported by advertising growth. These figures align with market expectations and the higher end of the company’s guidance.
Overall, CHWY ranks 3rd on our list of the best pet stocks to buy according to billionaires. While we acknowledge the potential of CHWY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHWY but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
