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On Friday, Piper Sandler expressed continued confidence in Chewy Inc . (NYSE:CHWY) by maintaining an Overweight stock rating and a $40.00 price target, representing a potential 19% upside from the current price of $33.67. According to InvestingPro data, the company, currently valued at $13.93 billion, is trading near its Fair Value, with a strong financial health rating of GOOD. The firm’s analyst highlighted Chewy’s strong position in the pet industry, noting that veterinarians are increasingly optimistic about pet population growth into 2026.
According to a recent survey, 59% of veterinarians anticipate an increase in overall pet growth. Chewy, which holds the second-largest market share in the industry, has reported slightly positive trends in pet adoption for the first quarter of 2025. The company’s revenue growth of 6.4% and gross profit margin of 29.2% reflect its strong market position. Specifically, dog adoption rates are stable, while cat adoption has seen a low single-digit increase. Industry expectations suggest growth at a low single-digit rate for the year. InvestingPro subscribers can access 11 additional key insights about Chewy’s growth prospects and financial health.
The survey also revealed that veterinarians are gradually showing a preference for Chewy over PetMeds, although Vet Source remains the top choice. However, the gap appears to be narrowing, with 65% of respondents disagreeing with the preference for Vet Source over Chewy, improving from 63% in the previous fall.
Chewy is actively expanding its presence in veterinary services by opening its own clinics. Currently, there are eight Chewy clinics, with plans to open an additional 8 to 10 throughout 2025. The company’s move into veterinary care has caught the attention of professionals, with 52% of surveyed veterinarians aware of Chewy’s clinics.
Piper Sandler’s reiteration of the Overweight rating and price target reflects the firm’s belief in Chewy’s growth prospects and strategic initiatives within the pet care sector. With a P/E ratio of 35.85 and positive earnings of $0.93 per share over the last twelve months, Chewy demonstrates solid fundamentals. For a comprehensive analysis of Chewy’s valuation and growth potential, investors can access the detailed Pro Research Report available on InvestingPro, which is part of the platform’s coverage of over 1,400 US stocks.
In other recent news, Chewy Inc. reported fourth-quarter results that exceeded expectations for both revenue and EBITDA, driven by an increase in active customers and improved operating leverage. TD Cowen adjusted its price target for Chewy to $44 while maintaining a Buy rating, citing positive guidance for the first quarter and a robust outlook for fiscal year 2025. RBC Capital Markets maintained an Outperform rating with a $42 price target, forecasting increased net customer additions and improved margin initiatives. CFRA also revised its price target to $42, emphasizing Chewy’s strong customer growth and margin expansion, while maintaining a Strong Buy rating. UBS raised its price target to $36, noting Chewy’s return to an attractive growth trajectory, yet kept a Neutral rating. Needham reiterated a Hold rating, acknowledging Chewy’s strategic investments and enhanced operations as factors behind the positive fourth-quarter performance. These recent developments suggest varied perspectives among analysts regarding Chewy’s growth and valuation.
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