• Chewy, Inc. has reported past first-quarter 2026 results, with sales of US$3,357.2 million and net income of US$94.8 million, alongside higher basic and diluted earnings per share of US$0.23 versus US$0.15 a year earlier.
• These results arrive as Chewy increases spending on artificial intelligence and veterinary services, signaling a push to broaden its pet health ecosystem and deepen customer engagement beyond core e-commerce.
• We’ll now examine how Chewy’s stronger Q1 earnings and stepped-up AI and veterinary investments may reshape its existing investment narrative.

Capitalize on the AI infrastructure supercycle with our selection of the 48 best 'picks and shovels' of the AI gold rush converting record-breaking demand into massive cash flow.

Chewy Investment Narrative Recap

To own Chewy, you need to believe its pet focused e commerce model can turn steady sales into healthier margins while expanding into higher value services. The stronger Q1 2026 earnings, with higher sales and net income, modestly support this margin story, but they do not remove near term concerns around heavy Autoship reliance and modest active customer growth, which still look like the key catalyst and the biggest risk, respectively.

The Modern Animal acquisition stands out against this earnings backdrop, because it directly ties into Chewy’s push beyond core retail into veterinary care and services. Connecting physical clinics with Chewy’s online pharmacy, AI tools and Chewy+ ecosystem is closely linked to the same catalysts investors are watching most carefully: revenue diversification, higher margin services and deeper engagement that is less dependent on subscription reorder behavior alone.

Yet, despite these positives, investors still need to be aware that Chewy’s heavy dependence on Autoship and modest customer growth could...

Chewy's narrative projects $15.9 billion revenue and $622.1 million earnings by 2029. This requires 8.0% yearly revenue growth and about a $399 million earnings increase from $222.8 million today.

Uncover how Chewy's forecasts yield a $39.85 fair value, a 95% upside to its current price.

Exploring Other Perspectives

Some of the lowest analysts were assuming revenue growth of only about 6.7 percent a year and earnings of roughly US$438 million by 2029, which is a far more cautious story than the consensus margin and growth narrative tied to Autoship and vet services; this latest Q1 result may prompt both camps to revisit those assumptions and you should be aware that their views can differ widely.

Explore 4 other fair value estimates on Chewy - why the stock might be worth over 3x more than the current price!

Reach Your Own Conclusion

Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts.

• A great starting point for your Chewy research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Chewy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Chewy's overall financial health at a glance.

Contemplating Other Strategies?

Markets shift fast. These stocks won't stay hidden for long. Get the list while it matters:

• Invest in the nuclear renaissance through our list of 88 elite nuclear energy infrastructure plays powering the global AI revolution.
• AI is about to change healthcare. These 39 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10b in market cap - there's still time to get in early.
• Find 46 companies with promising cash flow potential yet trading below their fair value.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.