Chewy (CHWY) Stock Drops Despite Market Gains: Important Facts to Note

Chewy (CHWY) ended the recent trading session at $23.80, demonstrating a -1.77% change from the preceding day's closing price. This change lagged the S&P 500's daily gain of 0.1%. Meanwhile, the Dow experienced a rise of 0.07%, and the technology-dominated Nasdaq saw an increase of 0.14%.

The online pet store's stock has dropped by 28.19% in the past month, falling short of the Retail-Wholesale sector's loss of 5.35% and the S&P 500's loss of 1.43%.

The investment community will be paying close attention to the earnings performance of Chewy in its upcoming release. On that day, Chewy is projected to report earnings of $0.28 per share, which would represent no growth from the year-ago period. Meanwhile, our latest consensus estimate is calling for revenue of $3.26 billion, up 0.25% from the prior-year quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.28 per share and a revenue of $12.6 billion, representing changes of +23.08% and +6.21%, respectively, from the prior year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Chewy. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.14% downward. Chewy presently features a Zacks Rank of #4 (Sell).

Digging into valuation, Chewy currently has a Forward P/E ratio of 15.48. This denotes no noticeable deviation relative to the industry average Forward P/E of 15.48.

We can also see that CHWY currently has a PEG ratio of 0.84. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. As of the close of trade yesterday, the Internet - Commerce industry held an average PEG ratio of 0.91.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 163, which puts it in the bottom 34% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.