• Chewy recently reported strong fiscal 2025 results, including robust net sales growth, margin expansion and record free cash flow, while issuing guidance for 2026 that calls for 8%–9% net sales growth, higher EBITDA margins and increased share repurchases.
• The company also outlined plans to broaden its Chewy Vet Care footprint and accelerate AI initiatives to enhance customer experience and operational efficiency, signaling a push to deepen engagement beyond its core e-commerce offering.
• We’ll now examine how Chewy’s expansion of veterinary care clinics and AI initiatives could influence its existing investment narrative and risks.

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Chewy Investment Narrative Recap

To own Chewy, you need to believe its pet e-commerce core and high Autoship mix can keep generating steady cash while new services add profitable layers. The latest results, with net sales growth, margin expansion and record free cash flow, support that view and appear to modestly reinforce the near term catalyst of improving profitability. Key risks around heavy Autoship reliance and only modest active customer growth do not materially change with this update.

The most relevant announcement here is Chewy’s plan to expand its Chewy Vet Care clinics while ramping AI to improve efficiency. Vet Care matters because it is meant to diversify revenue beyond Autoship and could help offset slower customer growth if clinics deepen engagement with existing users. Against guidance calling for higher EBITDA margins and more buybacks in 2026, execution in Vet Care will likely be watched closely as a proof point for that margin story.

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 86% upside to its current price.

Exploring Other Perspectives

Yet even with strong free cash flow and upbeat 2026 guidance, you should be aware that rising customer acquisition costs and slowing pet ownership could...

Before this earnings news, the most optimistic analysts were assuming Chewy could reach about US$16.8 billion of revenue and roughly US$786.8 million of earnings by 2029, which is far more bullish than consensus. When you compare that to concerns about rising acquisition costs and consumer shifts toward in person pet services, you can see how views on Chewy’s future can diverge sharply and why it may be worth weighing several perspectives.

Explore 4 other fair value estimates on Chewy - why the stock might be worth just $39.60!

The Verdict Is Yours

Don't just follow the ticker - dig into the data and build a conviction that's truly your own.

• 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.

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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.