Key Stats for Chewy Stock
- Current Price: $26.87
- Target Price (Mid): $67.21
- Street Target: $40.73
- Potential Total Return: +150.1%
- Annualized IRR: 20.9% / year
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What Happened?
Chewy (CHWY) trades at $26.87 today, down nearly 45% from its 52-week high of $48.62, with a max drawdown of 51.52% reached on March 20, 2026.
The underlying business, meanwhile, has quietly built one of the more durable recurring revenue models in specialty retail. That gap is exactly what has investors debating whether CHWY is a real setup or a value trap.
Bulls point to record free cash flow, an accelerating Autoship subscription base, and a mapped path to 10% EBITDA margins. Bears counter that pet household formation has stalled, industry growth is running at low single digits, and the path to a compelling net margin requires years of patient execution.
The unresolved question is whether Chewy can close that margin gap fast enough to justify buying at current prices.
On March 25, 2026, Chewy reported Q4 fiscal 2025 results that addressed the operational side of that debate. The stock closed up 1.66% on the day. Revenue on a normalized 13-week basis grew 8.1% year-over-year to $3.26 billion, active customers rose 4% to 21.3 million, and the company posted a record $232 million in quarterly free cash flow.
CEO Sumit Singh framed the year plainly: “We delivered strong net sales growth, significant margin expansion, and record free cash flow in 2025.”
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Is Chewy Undervalued Today?
At 11.88x forward EV/EBITDA and 16.65x forward earnings, Chewy is not expensive for a business growing at 8% with margins expanding roughly 100 basis points per year.
The NTM market cap-to-free-cash-flow multiple sits at 15.35x, and full year 2025 free cash flow came in at $562.4 million, up 24.3% year-over-year. For fiscal 2026, management is guiding for adjusted EBITDA between $900 million and $930 million.
The margin trajectory is the core of the case.
Chewy’s long-term target is a 10% adjusted EBITDA margin, against the 5.7% it delivered in fiscal 2025.
CFO Chris Deppe guided for approximately 100 basis points of expansion in 2026, with operating leverage doing more of the work than gross margin improvement.
Singh was specific about what remains: “We’ve got roughly 350 basis points to go to hit the 10%, and then we start the journey of moving beyond the 10% EBITDA.”
Three drivers give that trajectory credibility.
The first is AI. Management expects AI-driven efficiencies to contribute a low-tens-of-millions benefit in fiscal 2026, scaling to approximately $50 million or more in annualized savings by 2027, through reductions in customer service handle times, self-service automation, and fulfillment efficiency.
The second is Chewy Vet Care, now at 18 clinics across five states, which Singh called “the fastest NSPAC compounder in the business,” where NSPAC means net sales per active customer.
The third is private label. The newly launched Chewy Made platform targets low-to-mid-teens penetration of net sales from owned brands, versus low-to-mid-single digits today, at gross margins approximately 500 basis points above the base business.
Autoship customer sales grew 14% for the full year 2025, outpacing total revenue growth of 8.3%. Singh was direct about what this means for profitability in any macro environment: “Our model does not depend on a minimum net sales growth threshold to expand profitability.”
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TIKR Advanced Model Analysis
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The TIKR mid-case model prices Chewy at $67.21 by January 31, 2031, a 150.1% total return from $26.87 at an annualized IRR of 20.9% over approximately 4.8 years. The model is built on a 7.7% revenue CAGR and net income margins expanding to 7.7%, against a trailing one-year net income margin of 3.8%.
Two revenue drivers underpin the CAGR. The first is continued active customer growth consistent with the 150,000 to 250,000 net additions per quarter that Chewy delivered throughout fiscal 2025. The second is NSPAC expansion through health and wellness mix shift, Chewy Made private label penetration, and deeper engagement through Chewy Vet Care.
The primary margin driver is operating leverage from the Houston Fulfillment Center ramp and AI-driven cost reductions. The primary risk is gross margin compression if the competitive environment turns promotional or if sponsored advertising, Chewy’s high-margin retail media business, grows more slowly than expected.
The 27 analysts covering CHWY hold a mean target of $40.73, with 13 Buys, 8 Outperforms, and 6 Holds, and zero Sell ratings. That Street target implies 51.6% upside from current prices. The TIKR mid-case more than doubles that figure by pricing the full margin journey toward 10% EBITDA, rather than just the next twelve months.
Conclusion: Watch adjusted EBITDA margin at the next earnings report, expected around May 27, 2026. Management guided Q1 to be the year’s low point for both revenue growth and profitability. If Q1 holds near prior-year margin levels and Q2 guidance signals the ramp Singh described, the re-rating case becomes tangible. If margins disappoint or AI savings slip, the bear case regains ground.
At $26.87, with $562.4 million in annual free cash flow, a debt-free balance sheet with $879 million in cash, and a margin expansion roadmap being executed ahead of its own targets, the stock price finally looks like it reflects the pessimism rather than the progress.
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Should You Invest in Chewy?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up Chewy, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
