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Chewy (CHWY) Suffers a Larger Drop Than the General Market: Key Insights

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Chewy (CHWY - Free Report) closed at $32.96 in the latest trading session, marking a -1.67% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.29%. Meanwhile, the Dow lost 0.86%, and the Nasdaq, a tech-heavy index, lost 0.09%.

Shares of the online pet store witnessed a gain of 17.82% over the previous month, beating the performance of the Retail-Wholesale sector with its gain of 3.95% and the S&P 500's gain of 3.3%.

Market participants will be closely following the financial results of Chewy in its upcoming release. The company's earnings per share (EPS) are projected to be $0.23, reflecting a 53.33% increase from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $2.86 billion, indicating a 4.45% upward movement from the same quarter last year.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.14 per share and revenue of $11.83 billion. These totals would mark changes of +65.22% and +6.35%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Chewy. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. Chewy is currently a Zacks Rank #3 (Hold).

From a valuation perspective, Chewy is currently exchanging hands at a Forward P/E ratio of 29.4. For comparison, its industry has an average Forward P/E of 26.96, which means Chewy is trading at a premium to the group.

Also, we should mention that CHWY has a PEG ratio of 0.95. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. As the market closed yesterday, the Internet - Commerce industry was having an average PEG ratio of 1.41.

The Internet - Commerce industry is part of the Retail-Wholesale sector. Currently, this industry holds a Zacks Industry Rank of 66, positioning it in the top 27% 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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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