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Chewy (CHWY) Stock Sinks As Market Gains: Here's Why

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The latest trading session saw Chewy (CHWY - Free Report) ending at $16.93, denoting a -1.17% adjustment from its last day's close. This change lagged the S&P 500's 0.82% gain on the day. On the other hand, the Dow registered a gain of 0.41%, and the technology-centric Nasdaq increased by 0.95%.

Shares of the online pet store have depreciated by 19.01% over the course of the past month, underperforming the Consumer Staples sector's gain of 1.89% and the S&P 500's gain of 5.59%.

Investors will be eagerly watching for the performance of Chewy in its upcoming earnings disclosure. In that report, analysts expect Chewy to post earnings of $0.10 per share. This would mark a year-over-year decline of 37.5%. Meanwhile, the latest consensus estimate predicts the revenue to be $2.81 billion, indicating a 3.69% increase compared to the same quarter of the previous year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Chewy. Recent revisions tend to reflect the latest 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 demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 4.69% increase. Chewy currently has a Zacks Rank of #1 (Strong Buy).

Looking at its valuation, Chewy is holding a Forward P/E ratio of 24.22. For comparison, its industry has an average Forward P/E of 17.76, which means Chewy is trading at a premium to the group.

Investors should also note that CHWY has a PEG ratio of 1.06 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Consumer Products - Staples industry currently had an average PEG ratio of 1.92 as of yesterday's close.

The Consumer Products - Staples industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 99, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on

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