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Chewy (CHWY) Laps the Stock Market: Here's Why

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Chewy (CHWY - Free Report) closed the most recent trading day at $31.85, moving +0.44% from the previous trading session. This change outpaced the S&P 500's 0.39% gain on the day. Meanwhile, the Dow experienced a drop of 0.13%, and the technology-dominated Nasdaq saw an increase of 0.6%.

Shares of the online pet store witnessed a gain of 9.16% over the previous month, beating the performance of the Retail-Wholesale sector with its gain of 1.99% and the S&P 500's gain of 1.06%.

The investment community will be paying close attention to the earnings performance of Chewy in its upcoming release. The company is slated to reveal its earnings on December 4, 2024. In that report, analysts expect Chewy to post earnings of $0.23 per share. This would mark year-over-year growth of 53.33%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.86 billion, up 4.45% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $1.14 per share and a revenue of $11.83 billion, indicating changes of +65.22% and +6.35%, respectively, from the former year.

Investors should also note any recent changes to analyst estimates for Chewy. These revisions help to show the ever-changing nature of near-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been no change in the Zacks Consensus EPS estimate. Chewy is holding a Zacks Rank of #3 (Hold) right now.

With respect to valuation, Chewy is currently being traded at a Forward P/E ratio of 27.82. This valuation marks a premium compared to its industry's average Forward P/E of 25.82.

It's also important to note that CHWY currently trades at a PEG ratio of 0.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Internet - Commerce industry currently had an average PEG ratio of 1.28 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 61, positioning it in the top 25% of all 250+ industries.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.


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