Chewy, Inc. CHWY believes pet healthcare remains one of its largest long-term growth opportunities, supported by an estimated total addressable market of around $54 billion. Chewy Vet Care clinics continue to generate strong stand-alone economics while serving as effective customer acquisition and retention channels for the broader ecosystem. The shortage of veterinarians also provides Chewy with a structural advantage as it expands its veterinary clinic network.
To support this strategy, the company completed the acquisition of Modern Animal. Management noted that Modern Animal adds a complementary clinic footprint, strong clinical expertise and a technology-enabled operating model aligned with Chewy Vet Care. The acquisition is expected to accelerate clinic expansion by combining Chewy Vet Care’s organic growth with Modern Animal’s existing footprint and development pipeline, with the combined business projected to operate approximately 60 clinics by the end of fiscal 2026 and generate an embedded steady-state revenue contribution of about $290 million.
The company noted that Chewy Vet Care continues to strengthen the broader Chewy ecosystem by attracting new customers to the platform while encouraging existing customers to increase their spending following their initial clinic visit. This demonstrates the strategic value of its integrated pet healthcare offering by supporting customer acquisition, retention and a greater share of wallet, while reinforcing the company’s long-term growth strategy.
Additionally, technology-enabled workflows and AI-assisted tools are driving strong veterinary productivity, retention and employee satisfaction. Combined with Chewy’s recurring revenue model, scaled fulfillment network and expanding healthcare platform, these capabilities support its long-term 10% adjusted EBITDA margin target. Overall, Chewy’s expanding healthcare ecosystem strengthens its competitive moat by enhancing customer acquisition, retention and share of wallet while supporting long-term profitability.
Zacks Rundown for CHWY
CHWY shares have lost 25.3% in the past three months compared with the industry’s 2.6% decline. The company carries a Zacks Rank #5 (Strong Sell) at present.
From a valuation standpoint, CHWY trades at a forward price-to-earnings ratio of 21.74, lower than the industry’s average of 21.84.
The Zacks Consensus Estimate for earnings for the current and next fiscal year indicates year-over-year growth of 20.5% and 21.7%, respectively.
Stocks to Consider
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Phibro Animal Health Corporation PAHC operates as an animal health and mineral nutrition company in the United States, Latin America and Canada, Europe, the Middle East, Africa, and the Asia Pacific. PAHC currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for PAHC’s current fiscal-year sales and earnings implies growth of 14.8% and 47.4%, respectively, from the year-ago actuals. PAHC delivered a trailing four-quarter earnings surprise of 16.3%, on average.
Carvana Co. CVNA, currently carrying a Zacks Rank #2, operates an e-commerce platform for buying and selling used cars.
The Zacks Consensus Estimate for CVNA’s current financial-year sales implies growth of 38.5%, and the same for earnings implies a decline of 6.5% from the year-ago reported numbers. CVNA delivered a negative trailing four-quarter earnings surprise of 71.6%, on average.
Amazon.com Inc. AMZN engages in the retail sale of consumer products, advertising, and subscription services through online and physical stores in North America and internationally. At present, Amazon carries a Zacks Rank of 2.
The consensus estimate for Amazon’s current fiscal-year sales and earnings implies growth of 15.2% and 29.6%, respectively, from the year-ago figures. AMZN delivered a trailing four-quarter earnings surprise of 11.4%, on average.
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Chewy (CHWY) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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