Key Takeaways:
- Chewy is executing a comprehensive subscription-first transformation strategy through its Autoship program, Chewy+ membership platform, and vertical integration into healthcare services.
- Chewy stock could reasonably reach $48/share by January 2028, based on our valuation assumptions.
- This implies a total return of 28% from today’s price of $37/share, with an annualized return of 11% over the next 2.3 years.
Chewy (CHWY) is capturing market share in the $150 billion pet care industry through innovative subscription models that enhance customer retention, premium product curation, including fresh food offerings, and healthcare service integration via its expanding Chewy Vet Care network.
Its core business segments include pet food powered with automated fulfillment infrastructure. Moreover, the Autoship subscription service accounted for 83% of net sales in Q2 2025.
Chewy+ paid membership delivers enhanced customer benefits, while its veterinary care services segment aims to target 20 clinic locations by year-end.
The pet care leader delivered Q2 revenue of $3.1 billion, up 8.6% year over year, with an adjusted EBITDA margin of 5.9% and free cash flow of $106 million.
Chewy demonstrates strategic execution under the leadership of CEO Sumit Singh through multiple growth initiatives. It achieved record Autoship sales of $2.58 billion with growth rates outpacing total revenue at nearly 15%.
The newly launched Chewy+ program reached 3% of monthly sales after one quarter, while the fresh food brand “Get Real” launched with strong palatability scores and premium market positioning.
CHWY stock went public in 2019 and continues capital return programs, deploying $125 million in buybacks in Q2, while maintaining a debt-free balance sheet and a cash balance of almost $600 million.
Here’s why Chewy stock could deliver attractive returns through 2028 as it capitalizes on the expansion of subscription penetration, while scaling premium categories and healthcare services across the growing pet humanization trend.
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What the Model Says for Chewy Stock
We analyzed the upside potential for Chewy stock using valuation assumptions based on its subscription transformation capabilities and competitive positioning across integrated pet care services.
Chewy’s multi-vertical strategy creates diversified revenue streams, while subscription programs validate that recurring delivery models can drive wallet share consolidation and operational leverage in competitive e-commerce markets.
Based on estimates of 7.7% annual revenue growth, 3.2% operating margins, and a normalized P/E valuation multiple of 27.0x, the model projects Chewy stock could rise from $37/share to $48/share.
That would be a 28% total return, or an 11% annualized return over the next 2.3 years.
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for CHWY stock:
1. Revenue Growth: 7.7%
Chewy increased revenue by 8.6% in Q2, demonstrating clear market share gains in a low-single-digit industry growth environment.
Our 7.7% forecast reflects structural advantages from scaling the subscription model, consolidating customer wallet share, and expanding into premium categories, including healthcare and fresh food segments.
2. Operating Margins:3.2%
The company achieved 5.9% adjusted EBITDA margins in Q2, while investing in growth infrastructure, including the expansion of fulfillment centers and program development.
Management targets sustainable margin improvement through operational leverage as automated facilities reach full capacity and higher-margin subscription services scale.
The Houston fulfillment center requires six months to fully ramp, while Autoship and Chewy+ programs deliver superior unit economics compared to one-time purchases.
3. Exit P/E Multiple: 27x
CHWY stock trades at multiples that reflect its evolution toward subscription-first operations, with improving customer lifetime value and retention metrics.
We apply measured valuation levels considering Chewy’s execution track record, customer experience differentiation, and competitive advantages from fulfillment scale and healthcare integration.
Pet humanization trends and premium category growth should support reasonable valuations as the company expands its integrated service platform across the addressable market.
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What Happens If Things Go Better or Worse?
Different scenarios for Chewy stock through 2030 show varied outcomes based on subscription execution and market dynamics: (these are estimates, not guaranteed returns):
- Low Case: Slower subscription adoption and competitive pressure → 12% annual returns
- Mid Case: Successful program scaling and healthcare expansion → 19% annual returns
- High Case: Strong premium category momentum and market leadership → 25% annual returns
Even the conservative scenario offers positive returns, supported by the defensibility of the subscription model and proven execution capabilities in customer experience.
The upside case for CHWY stock could deliver compelling returns through successful subscription penetration while maximizing healthcare service opportunities and achieving targeted operational leverage.
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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!
