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    A Look At Chewy (CHWY) Valuation As Growth Concerns Meet Profitability And Subscription Questions

    Simply Wall St·02/24/2026 14:28:34
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    Recent commentary on Chewy (CHWY) has focused on two issues: slowing projected sales growth and the company’s broad definition of subscription revenue, even as it reports ongoing revenue growth and sustained profitability.

    See our latest analysis for Chewy.

    Chewy’s share price, now at $24.71, has seen a 1-day share price return decline of 6.58% and a 30-day share price return decline of 22.03%. Its 1-year total shareholder return decline of 28.29% underlines fading momentum as investors reassess growth expectations and perceived risks around its subscription narrative.

    If this focus on recurring revenue has you rethinking where growth might come from next, it could be worth scanning 22 top founder-led companies as a way to broaden your watchlist.

    With Chewy now profitable and trading at a discount to some analyst targets, the key question is whether recent weakness leaves the stock undervalued or if the market is already accounting for slower growth and subscription risk.

    Most Popular Narrative: 45% Undervalued

    Chewy’s most followed narrative points to a fair value of about $44.95 per share versus the last close at $24.71. This frames a large valuation gap that hinges on execution in memberships, advertising and new services.

    The company's increased focus on innovation, such as the Chewy+ membership and mobile app improvements, is driving new customer acquisition and higher conversion rates, enhancing both revenue growth and net sales per active customer (NSPAC).

    Read the complete narrative.

    Want to see what kind of revenue growth and profit margins are baked into that fair value? The narrative leans on richer earnings, a premium future P/E and steady membership driven cash flows. Curious which assumptions really move the model and how sensitive that $44.95 figure is to them?

    Result: Fair Value of $44.95 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this hinges on Autoship staying resilient, and on newer bets like Vet Care Clinics and sponsored ads living up to expectations rather than dragging on margins.

    Find out about the key risks to this Chewy narrative.

    Another View: Multiples Paint a Hotter Picture

    If the $44.95 fair value feels compelling, the current P/E of 49.7x is a useful reality check. That multiple is far higher than the US Specialty Retail industry at 21x, peers at 22.6x, and even a fair ratio of 26.7x, which points to richer valuation risk than the DCF implies. How comfortable are you paying that kind of premium?

    See what the numbers say about this price — find out in our valuation breakdown.

    NYSE:CHWY P/E Ratio as at Feb 2026
    NYSE:CHWY P/E Ratio as at Feb 2026

    Next Steps

    Mixed on the story so far or leaning one way already? Act while the details are fresh and consider both sides by reviewing our 3 key rewards and 1 important warning sign.

    Looking for more investment ideas?

    If Chewy has sharpened your thinking, do not stop here. Widen your search now so you are not relying on a single story or sector.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.