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Chewy (CHWY) Rises But Trails Market: What Investors Should Know

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Chewy (CHWY - Free Report) closed at $17.90 in the latest trading session, marking a +0.45% move from the prior day. The stock's change was less than the S&P 500's daily gain of 1.25%. Elsewhere, the Dow saw an upswing of 0.97%, while the tech-heavy Nasdaq appreciated by 1.3%.

Coming into today, shares of the online pet store had lost 14.66% in the past month. In that same time, the Consumer Staples sector gained 4.02%, while the S&P 500 gained 1.58%.

The investment community will be closely monitoring the performance of Chewy in its forthcoming earnings report. The company is expected to report EPS of $0.09, down 43.75% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.81 billion, up 3.69% from the year-ago period.

It is also important to note the recent changes to analyst estimates for Chewy. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Chewy is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Chewy is currently trading at a Forward P/E ratio of 30.12. This valuation marks a premium compared to its industry's average Forward P/E of 17.71.

We can additionally observe that CHWY currently boasts a PEG ratio of 1.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. As of the close of trade yesterday, the Consumer Products - Staples industry held an average PEG ratio of 1.79.

The Consumer Products - Staples industry is part of the Consumer Staples sector. At present, this industry carries a Zacks Industry Rank of 110, placing it within the top 44% of over 250 industries.

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

Be sure to use to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.

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