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    Is Autoship Strength and SmartEquine Deal Altering The Investment Case For Chewy (CHWY)?

    Simply Wall St·12/19/2025 04:48:11
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    • Chewy, Inc. recently reported its third-quarter 2025 results, with net sales rising to US$3,116.6 million and net income increasing to US$59.2 million, while also narrowing its full-year and confirming fourth-quarter 2025 sales guidance.
    • The company spotlighted the outperformance of its Autoship subscription program and announced the SmartEquine acquisition, expanding into higher-margin premium health and nutraceutical offerings.
    • We’ll now explore how Chewy’s Autoship momentum and SmartEquine acquisition shape the company’s broader investment narrative and future growth drivers.

    Find companies with promising cash flow potential yet trading below their fair value.

    Chewy Investment Narrative Recap

    To own Chewy, I think you need to believe the company can turn its large Autoship base into steadily growing, higher-margin recurring revenue while broadening into pet health and services. The latest Q3 beat and reaffirmed Q4 guidance support that near term, but the narrowed full-year outlook and modest active customer growth keep concentration in Autoship and customer acquisition trends as the key near term catalyst and the most important risk, respectively.

    The SmartEquine acquisition looks most relevant here, because it ties directly into Chewy’s push into higher-margin health and nutraceutical offerings that could help its long term adjusted EBITDA margin ambitions. If these newer verticals, alongside Autoship and Chewy+, gain traction without a sharp step up in costs, they may help address concerns about whether Chewy can realistically move toward its targeted 10% adjusted EBITDA margin over time.

    Yet while Autoship is a strength today, investors should be aware that any shift in subscription behavior or service reliability could...

    Read the full narrative on Chewy (it's free!)

    Chewy’s narrative projects $15.1 billion revenue and $467.3 million earnings by 2028.

    Uncover how Chewy's forecasts yield a $44.95 fair value, a 39% upside to its current price.

    Exploring Other Perspectives

    CHWY 1-Year Stock Price Chart
    CHWY 1-Year Stock Price Chart

    Seven members of the Simply Wall St Community currently estimate Chewy’s fair value between US$44.41 and US$56.86, underlining how far opinions can stretch. Set against that, Chewy’s heavy reliance on Autoship for over 80% of sales raises clear questions about how stable those forecasts might prove, so it is worth weighing several contrasting views before you decide where you stand.

    Explore 7 other fair value estimates on Chewy - why the stock might be worth just $44.41!

    Build Your Own Chewy Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

    • A great starting point for your Chewy research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
    • Our free Chewy research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Chewy's overall financial health at a glance.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.