Chewy Inc. (CHWY): What is the Risk Factor?

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Chewy Inc. (NYSE:CHWY) saw an upside of 5.06% to close Monday at $43.42 after adding $2.09 on the day. The 5-day average trading volume is 4,134,660 shares of the company’s common stock. It has gained $44.97 in the past week and touched a new high 2 times within the past 5 days. An average of 3,391,100 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 3,589,498.

CHWY’s 1-month performance is 9.70% or $4.10 on its low of $33.96 reached on 01/04/23. The company’s shares have touched a 52-week low of $22.22 and high of $54.19, with the stock’s rally to the 52-week high happening on 01/18/23. YTD, CHWY has achieved 17.10% or $6.34 and has reached a new high 8 times. However, the current price is down -19.87% from the 52-week high price.

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Insider Transactions

CHWY stock investors last saw insider trading activity on Jan 13.Marte Mario Jesus (Chief Financial Officer) most recently sold 39,289 shares at $43.81 per share on Jan 13. This transaction cost the insider $1,721,251. General Counsel, Helfrick Susan, sold 34,406 shares at a price of $40.80 on Dec 16. Then, on Dec 15, General Counsel Helfrick Susan sold 19,662 shares at a price of $40.48 per share. This transaction amounted to $795,977.

Valuation Metrics

CHWY stock has a beta of 0.71. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 1.81 while the price-to-book (PB) in the most recent quarter is 111.33.

Chewy Inc.’s quick ratio for the period ended October 30 was 0.50, with the current ratio over the same period at 0.90. In terms of profitability, the gross margin trailing 12 months is 27.40%. The firm’s gross profit as reported stood at $2.37 billion against revenue of $8.89 billion.

Earnings Surprise

For the quarterly period ending October 30 this year, Chewy Inc.’s cash and short-term investments amounted to $296.78 million against total debt of $510.02 million. Net income and sales went up compared to those figures reported in the previous quarter. Net income grew 1495.67% to $2.31 million, while revenue of $22.35 million was -867.53% off the previous quarter. Analysts expected CHWY to announce -$0.09 per share in earnings in its latest quarter, but it posted $0.01, representing a 111.10% surprise. EBITDA for the quarter stood at more than $22.58 million. CHWY stock balance sheet for the quarter ending October 30 shows that total liabilities totaled 2.33 billion, with total debt at $510.02 million. Shareholders hold equity totaling $423.35 million.

Let’s look briefly at Chewy Inc. (CHWY) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 23 January was 60.67% to suggest the stock is trending Neutral, with historical volatility in this time period at 58.40%.

The stock’s 5-day moving average is $42.10, reflecting a -0.78% or -$0.34 change from its current price. CHWY is currently trading +5.39% above its 20-day SMA, +14.23% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +24.41% and SMA200 by-1.85%.

Stochastic %K and %D was 68.91% and 68.85% and the average true range (ATR) pointed at 2.40. The RSI (14) points at 57.74%, while the 14-day stochastic is at 85.89% with the period’s ATR at 2.42. The stock’s 9-day MACD Oscillator is pointing at -0.98 and 1.01 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Chewy Inc. (NYSE: CHWY), Wolfe Research downgraded it to a Peer perform rating. They previously had an Outperform rating on the stock. Analysts offering their rating for CHWY stock have a consensus rating for the stock as Overweight. Currently, 2 brokerage advisors rate CHWY as a “sell,”, while 13 advise that investors “Hold.” 0 analysts have rated the stock as underweight. 2 rates the stock as overweight while 11 have offered a “buy” rating.

What is CHWY’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $6.00 and a high of $57.00, with their median price target at $50.00. Looking at these predictions, the average price target given by analysts is for Chewy Inc. (CHWY) stock is $43.86.

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