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Chewy Stock Surges 12% on Strong Earnings Outlook, Still Attractive for Investors

Apr 05, 2026 12:35 UTC
AAPL
Short term

Chewy's shares climbed 12% following a positive earnings outlook in March 2026, but the stock remains a compelling buy for long-term investors. The e-commerce company is expanding its market reach and improving margins.

  • Chewy's stock rose 12% following a strong 2026 earnings outlook.
  • The company expects 8.5% revenue growth in 2026, with EBITDA margins expanding to 6.6%-6.8%.
  • Chewy has expanded its Vet Care clinics to 18 and is investing in private-label products.
  • The Autoship program now accounts for 84% of fourth-quarter net sales.
  • Chewy's stock trades at 12 times EBITDA expectations despite 25%-30% EBITDA growth forecasts.
  • Analysts suggest the stock remains attractive for long-term investors.

Chewy (NYSE: CHWY) saw its stock surge 12% after the end of March 2026 when the company released a strong earnings outlook for 2026. Despite the sharp rise, analysts suggest the stock still offers value for investors. The e-commerce company is executing on strategies to grow its addressable market while expanding profit margins. Management expects to build on 8.3% revenue growth in 2025 with 8.5% growth at the midpoint of its 2026 guidance. EBITDA margins are projected to rise from 5.7% to between 6.6% and 6.8% in 2026, with long-term goals of exceeding 10% EBITDA margins. Chewy is expanding its Vet Care clinics, which now total 18, and enhancing its pet pharmacy and insurance offerings to drive customer engagement and loyalty. The company has also increased investments in private-label products, including the 'Chewy Made' brand, to boost gross margins. Additionally, Chewy's Autoship program, which accounts for 84% of fourth-quarter net sales, contributes to inventory predictability and customer retention. The stock currently trades at an enterprise value of 12 times EBITDA expectations, despite anticipated EBITDA growth of 25% to 30% in 2026. While the Motley Fool Stock Advisor team has not included Chewy in its top 10 stock picks, the company's strategic initiatives and valuation suggest potential for continued growth.

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