What to Watch With Chewy Stock in 2026
- - What to Watch With Chewy Stock in 2026
Will Healy, The Motley FoolDecember 13, 2025 at 11:55 PM
0
Key Points -
Chewy has stood out in online retailing through superior customer service.
It has boosted revenue with its Autoship program and by expanding into other business lines.
10 stocks we like better than Chewy ›
Investing in online pet retailer Chewy (NYSE: CHWY) has been a rough ride in recent years. The one-time pandemic darling experienced a reversal of fortune in the 2022 bear market, and the stock has traded in a narrow range since then.
However, business conditions have become increasingly favorable for the company, and it continues to develop new revenue streams. Could those changes make 2026 the year that Chewy stock finally recovers?
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks »
Let's take a closer look.
A dog carrying a bowl in its mouth.
Image source: Getty Images.
Where Chewy stands today
Chewy competes with larger online retailers like Amazon, as one might expect. Chewy combines low prices, fast shipping, supplier relationships, and data analytics to offer desired products rapidly at competitive prices.
Still, what has made it stand out is excellent customer service, something not found with many other e-retailers. Such service has fostered customer loyalty and likely enhanced the popularity of its Autoship service. Autoship delivers consumable products to customers periodically, providing the company with a steady revenue stream.
Additionally, Chewy has ventured beyond traditional retailing to boost revenue. Among these additional sources are pet insurance, telehealth services, and pharmaceutical products.
Improving financials
If the financials are any indication, its efforts are succeeding. In the first nine months of fiscal 2025 (ended Nov. 2), Chewy reported more than $9.3 billion in net sales, an 8% increase from the same period in fiscal 2024.
Costs and expenses grew at a slightly slower pace than revenue. Still, Chewy received a $216 million income tax benefit in 2024. That meant the net income of $184 million in the first three quarters of 2025 was far below the $371 million earned in the same year-ago period.
It also seems to hide Chewy's financial progress and may partially explain why the stock has risen by only about 5% so far this year. The supposed "reduction" in net income temporarily took the price-to-earnings (P/E) ratio to 100.
However, even when not accounting for tax benefits, Chewy's profits grew significantly. The forward P/E ratio, which does not include any one-time benefits, is at about 28. While not cheap, it is slightly below the S&P 500 average P/E of 31.
Analysts forecast an 8% revenue increase in fiscal 2027. As investors become more aware of such improvements, it increases the likelihood that Chewy stock could experience a recovery in 2026.
Chewy in 2026
Chewy's efforts to foster new revenue sources have put the company in a growth mode, possibly enough that investors could renew their interest in the stock in 2026.
Indeed, investors may have forgotten about Chewy stock after its drop in 2022. Nonetheless, the company's efforts to build new revenue streams have put Chewy's financials on a growth track, and that expansion is on track to continue.
Its improvements have not yet been priced into Chewy stock. However, the company has prospects for improved revenue and profit growth. With its valuation set to fall closer to market averages, the likelihood of a 2026 recovery in Chewy stock is rising.
Should you invest $1,000 in Chewy right now?
Before you buy stock in Chewy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chewy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $513,353!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,072,908!*
Now, it’s worth noting Stock Advisor’s total average return is 965% — a market-crushing outperformance compared to 195% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of December 8, 2025
Will Healy has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Chewy. The Motley Fool has a disclosure policy.
Source: “AOL Money”
