Chevy (NYSE: CHWY ) is a company that pet parents may know well. It’s an online retailer of everything they need for their dogs, cats, cats, and other furry and furry friends. This has helped the company increase revenue, reach profitability, and grow profits in recent years.
The stock’s performance hasn’t followed, as Chewy’s shares have fallen 36% in three years. I don’t see this as a reflection of the business – instead, I think Chevy lagged behind as investors turned to popular investment themes like artificial intelligence (AI) or the likes of broader e-commerce players like Amazon.
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All of this creates an opportunity for investors to look for cheap, high-quality stocks that may deliver over the long term. Can buying Chewy today set you up for life? Let’s find out.
So, first, let’s take a quick look at Chewy’s business. The retailer offers many products and services for your pet, from food and toys to prescription drugs and health insurance. This has helped the company become profitable and grow revenue over the past five years.
What I love most about Chewy is that it has successfully built a loyal customer base. We can do this through our Autoship service – you can sign up to have your products automatically reordered and shipped to your door. Now here’s the best part: Autoship sales make up more than 80% of Chewy’s net sales. It shows that customers keep coming back to the company, and it gives investors insight into future sales.
Additionally, Chevy has expanded steadily and reasonably over the past few years. The company opened an e-commerce platform for Canadian customers, and in the United States, Chewy is opening veterinary clinics. Vet clinics are a great idea because, by offering Chewy to reach a new audience, they represent an additional revenue stream. Importantly, clinics also introduce these clients to the e-commerce site if they are not already familiar with it.
Meanwhile, Chewy trades for 16x forward earnings estimates — its lowest level in three years.
Now, let’s get back to our question: Can Chevy set you up for life? Chewy is a great buy right now. The stock is reasonably priced, and the company has built a strong track record of growth. Loyal customers are driving this growth, suggesting it will continue. All of these points are positive, and they should eventually push Chewy’s stock higher, even significantly higher.
