CHWY Should I Buy
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Chewy Inc (CHWY) is a good buy for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The company's strong financial performance, positive analyst sentiment, and attractive valuation make it a compelling choice despite some short-term risks. The lack of Intellectia trading signals does not detract from the long-term potential of the stock.
The MACD is positive and expanding, indicating bullish momentum. However, the RSI is neutral at 60.37, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5). Key resistance levels are at 27.196 and 28.32, with support at 23.555 and 22.431. Overall, the technical indicators suggest a mixed trend with potential for upward movement.
Strong Q3 financial performance with 8.3% YoY revenue growth, 1405.6% YoY net income growth, and 1300% YoY EPS growth.
Positive analyst sentiment, including upgrades and increased price targets, with Raymond James upgrading to Outperform and Mizuho naming Chewy as its Top Pick.
Chewy's focus on long-term drivers such as pet-category share gains, Autoship, and healthcare services.
Recent news highlighting Chewy as an attractive investment option for 2026.
Hedge funds are selling, with a 382.78% increase in selling activity over the last quarter.
Concerns about profitability and reliance on Autoship customers for 84% of sales.
The stock has recently hit a new low, raising questions about near-term price stability.
Bearish moving averages and potential for a -8.53% decline over the next month based on historical patterns.
Chewy reported strong financials for Q3 2026, with revenue of $3.1 billion (up 8.3% YoY), net income of $59.2 million (up 1405.6% YoY), and EPS of $0.14 (up 1300% YoY). Gross margin improved to 29.78% (up 1.53% YoY). These results reflect robust growth and operational efficiency.
Analysts are generally positive on Chewy. Recent upgrades include Raymond James upgrading to Outperform with a $28 price target and Mizuho naming Chewy as its Top Pick for 2026. Wolfe Research maintains an Outperform rating with a $44 price target, citing opportunities for growth driven by AI developments and product catalysts. However, UBS has a Neutral rating with a $41 price target, reflecting some caution.
