A strong performer from today's morning trading session is Chewy, whose shares rose 3.1% to $39.14 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Chewy's Valuation Is in Line With Its Sector Averages:
Chewy, Inc., together with its subsidiaries, engages in the e-commerce business in the United States. The company belongs to the Consumer Discretionary sector, which has an average price to earnings (P/E) ratio of 20.93 and an average price to book (P/B) ratio of 2.93. In contrast, Chewy has a trailing 12 month P/E ratio of 108.7 and a P/B ratio of 41.59.
Chewy has moved 26.7% over the last year compared to 15.1% for the S&P 500 — a difference of 11.6%. Chewy has a 52 week high of $48.62 and a 52 week low of $26.28.
Strong Revenue Growth but Not Enough Current Assets to Cover Current Liabilities:
| 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $4,847 | $7,146 | $8,967 | $10,119 | $11,148 | $11,861 |
| Gross Margins | 24.0% | 25.0% | 27.0% | 28.0% | n/a | 28.0% |
| Net Margins | -5% | -1% | -1% | 0% | 0% | 3% |
| Net Income (M) | -$252 | -$92 | -$75 | $50 | $40 | $393 |
| Net Interest Expense (M) | $0 | -$2 | -$2 | $9 | n/a | $35 |
| Depreciation & Amort. (M) | $31 | $36 | $55 | $83 | $110 | $73 |
| Diluted Shares (M) | 409 | 418 | 428 | 431 | 427 | 425 |
| Earnings Per Share | -$0.63 | -$0.23 | -$0.18 | $0.12 | $0.09 | $0.91 |
| EPS Growth | n/a | 63.49% | 21.74% | 166.67% | -25.0% | 911.11% |
| Avg. Price | $28.96 | $50.16 | $80.52 | $38.84 | $23.63 | $37.95 |
| P/E Ratio | -45.97 | -218.09 | -447.33 | 323.67 | 262.56 | 40.81 |
| Free Cash Flow (M) | -$2 | $2 | $9 | $119 | $343 | $452 |
| CAPEX (M) | $49 | $131 | $183 | $230 | $143 | $144 |
| Current Ratio | 0.86 | 0.89 | 0.85 | 0.96 | 0.74 | 0.8 |
Chewy has rapidly growing revenues and increasing reinvestment in the business, generally positive cash flows, and a strong EPS growth trend. However, the firm suffers from slimmer gross margins than its peers and not enough current assets to cover current liabilities because its current ratio is 0.8.
