Chewy (NYSE:CHWY) Shares Gap Down Following Weak Earnings

Key Points

• Chewy's shares fell significantly, opening at $37.11 after previously closing at $42.10, due to weaker than expected quarterly earnings which showed EPS of $0.14, missing estimates by $0.19.
• The company's revenue for the quarter was $3.10 billion, slightly exceeding the consensus estimate of $3.08 billion, reflecting an 8.6% increase year-over-year.
• Despite recent stock drops, several analysts have upgraded Chewy's ratings, with JPMorgan raising the target price from $36.00 to $47.00 and maintaining an "overweight" rating.

Chewy (NYSE:CHWY - Get Free Report)'s share price gapped down before the market opened on Wednesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $42.10, but opened at $37.11. Chewy shares last traded at $35.31, with a volume of 10,942,276 shares traded.

The company reported $0.14 EPS for the quarter, missing analysts' consensus estimates of $0.33 by ($0.19). The firm had revenue of $3.10 billion during the quarter, compared to the consensus estimate of $3.08 billion. Chewy had a net margin of 3.21% and a return on equity of 35.04%. The business's revenue for the quarter was up 8.6% on a year-over-year basis. During the same quarter last year, the firm earned $0.24 earnings per share. Chewy has set its FY 2025 guidance at EPS. Q3 2025 guidance at 0.280-0.330 EPS.

Analyst Ratings Changes

Several analysts recently issued reports on CHWY shares. JPMorgan Chase & Co. upped their target price on Chewy from $36.00 to $47.00 and gave the stock an "overweight" rating in a report on Thursday, June 12th. Citizens Jmp upgraded Chewy to a "strong-buy" rating in a report on Thursday, July 10th. Wall Street Zen lowered Chewy from a "buy" rating to a "hold" rating in a report on Saturday, June 14th. Morgan Stanley reiterated an "overweight" rating and set a $50.00 target price (up previously from $39.00) on shares of Chewy in a report on Thursday, June 12th. Finally, Guggenheim reiterated a "buy" rating and set a $45.00 target price (up previously from $42.00) on shares of Chewy in a report on Thursday, June 12th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating and six have issued a Hold rating to the company. According to data from MarketBeat, the stock currently has an average rating of "Moderate Buy" and an average target price of $43.94.

Insider Transactions at Chewy

In other news, CAO William G. Billings sold 20,142 shares of the company's stock in a transaction that occurred on Monday, August 4th. The stock was sold at an average price of $35.57, for a total value of $716,450.94. Following the transaction, the chief accounting officer owned 29,464 shares of the company's stock, valued at approximately $1,048,034.48. This represents a 40.60% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. Also, major shareholder Argos Holdings Gp Llc sold 29,940,120 shares of the company's stock in a transaction that occurred on Wednesday, June 25th. The shares were sold at an average price of $41.75, for a total value of $1,250,000,010.00. The disclosure for this sale can be found here. Insiders sold a total of 30,008,777 shares of company stock worth $1,252,444,321 over the last three months. Company insiders own 0.43% of the company's stock.

Institutional Investors Weigh In On Chewy

A number of large investors have recently added to or reduced their stakes in CHWY. Ameriprise Financial Inc. lifted its stake in Chewy by 311.9% during the fourth quarter. Ameriprise Financial Inc. now owns 226,177 shares of the company's stock worth $7,575,000 after purchasing an additional 171,273 shares during the last quarter. DZ BANK AG Deutsche Zentral Genossenschafts Bank Frankfurt am Main bought a new stake in Chewy during the fourth quarter worth $133,000. Jacobs Levy Equity Management Inc. bought a new stake in Chewy during the fourth quarter worth $2,086,000. Nomura Holdings Inc. lifted its stake in Chewy by 36.4% during the fourth quarter. Nomura Holdings Inc. now owns 30,793 shares of the company's stock worth $1,031,000 after purchasing an additional 8,219 shares during the last quarter. Finally, Man Group plc lifted its stake in Chewy by 210.0% during the fourth quarter. Man Group plc now owns 426,324 shares of the company's stock worth $14,278,000 after purchasing an additional 288,787 shares during the last quarter. Institutional investors and hedge funds own 93.09% of the company's stock.

Chewy Stock Down 15.8%

The firm has a 50 day simple moving average of $38.82 and a two-hundred day simple moving average of $38.31. The stock has a market capitalization of $14.72 billion, a P/E ratio of 39.85, a PEG ratio of 8.69 and a beta of 1.65.

Chewy Company Profile

Chewy, Inc, together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications.

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