Chewy

CHWY

Market cap $9.22B

Recently, Zacks.com users have been paying close attention to Chewy (CHWY). This makes it worthwhile to examine what the stock has in store.

The artificial intelligence (AI) boom continues to set the direction for global financial markets in 2026, but Goldman Sachs strategists argue that opportunities exist outside this tech narrative as well. Concentrated leadership in the AI trade has propelled US benchmark indices to record levels this year, prompting concerns that the current environment resembles a single trade rather than a diversified market.

The latest trading day saw Chewy (CHWY) settling at $21.25, representing a +2.51% change from its previous close.

CHWY's Autoship strength, AI push and vet expansion fuel growth, while WOOF boosts services, fresh food and private-label offerings.

CHWY's debt-free balance sheet, record free cash flow and rising liquidity give it room to fund growth and boost buybacks.

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?

Chewy built a leading e-commerce platform for pets and is now evolving into a more integrated healthcare provider with the Modern Animal deal. Autoship sales continue to outpace overall revenue growth, showing the value of its subscription service.

Chewy (CHWY) is upgraded to Strong Buy as the valuation implies a major margin of safety that doesn't seem justified by current macro headwinds. CHWY's fundamentals remain solid, with 14% Autoship sales growth, $562M FCF, and a nearly spotless balance sheet. Recent acquisition of Modern Animal and a $500M buyback expansion enhance growth prospects and shareholder returns.

Fueled by fast sales and earnings growth, Chewy's stock price soared during the early days of the pandemic. Growth has returned to a more reasonable pace.

CHWY's AI investments, recurring Autoship sales and vet care expansion are fueling optimism despite recent stock weakness.