Should you buy Chewy stock? (July 2024)

Chewy stock analysis. Ticker: $CHWY

Chewy stock surged over 30% last week after Roaring Kitty aka Keith Gil revealed a $200 million dollar position in the company. At the latest price, the online pet business now has a market cap of 10.9 billion dollars. With 1.1 billion of cash and no debt on the balance sheet the enterprise value is 9.8 billion.

Revenue over the last 12 months comes to 11.2 billion with 84 million of net income, 256 million of adjusted ebitda and 268 million of free cash flow. So Chewy stock is now valued at 130 times earnings and 37 times free cash flow.

At an investor day last year Chewy unveiled a plan to reignite growth and get to a long term adjusted ebitda margin over 10%. Such a margin would mean strong earnings growth for Chewy and a significant increase in the stock price. And so far the plan seems to be working. Chewy has grown its recurring autoship revenue, introduced advertising and sponsorships, expanded into Canada and begun to open new offline veterinary clinics. These clinics can drive new revenue as well as awareness for the Chewy brand.True to form, adjusted ebitda margin took a big step up in the latest quarter hitting 5.7%, a significant improvement..

If this performance holds, Chewy could deliver over 500 million in free cash flow this year. That’s a lot considering the current valuation. And Chewy stock, which has rallied 60% since May should have more upside ahead.

#investing #stocks #3mb #chewystock

[R_]

They bought back 500m of shares, that will increase eps and delay dilution. Cash balance is around 600m.

[nathanludwig]

Love your channel bro! your gonna blow up, a lot of traders don't make time for fundamental analysis

[ReaLTheKinG]

can you do soundhound (soun) please keep up the great work

[blakeaaron]

What does CHWY do that Amazon doesn't already (pet food, toys, supplies, etc), or can't (such as pet RXs)?
I don't get what Chewy's durable competitive advantage is that will sustain growth.