Is Chewy (CHWY) Undervalued Ahead Of Its September 9 Earnings?
Chewy (CHWY) is back in focus after a 2% gain in its latest session, which came despite a mixed broader market as investors look ahead to the company’s earnings report on September 9, 2026.
See our latest analysis for Chewy.
Chewy’s recent 7.16% 7 day share price return and 18.36% 30 day share price return suggest short term momentum is improving, although the 39.41% decline in 1 year total shareholder return shows longer term performance is still weak.
If you are looking beyond Chewy to see where else growth stories may be forming in related areas of the market, it could be worth scanning 20 top founder-led companies
The stock has bounced in the short term while longer term holders are still sitting on steep declines. For anyone eyeing Chewy at around US$24.69 ahead of earnings, the key question is whether the current valuation still offers an attractive trade off between risk and reward.
Most Popular Narrative: 20.5% Undervalued
Chewy's most followed narrative points to a fair value of about $31.05 per share, compared with the latest close at $24.69. This puts the focus on how future growth and margins might support that gap.
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).
Active customer growth has reached an inflection point, with expectations for continued growth in 2025 due to improved marketing strategies and customer acquisition channels, positively affecting top-line revenue.
Want to understand why this narrative sees more upside in Chewy even with slower revenue forecasts than the broader market? The answer lies in how earnings, margins, and customer monetisation are expected to evolve together, and in the profit multiple that would still be required to justify that higher fair value.
Result: Fair Value of $31.05 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, there are still clear risks for Chewy if Autoship growth slows, or if new vet clinics and ad products do not gain the traction analysts currently assume.
Find out about the key risks to this Chewy narrative.
Another View On Chewy Using Market Multiples
Chewy might look attractive against the $31.05 fair value narrative, but its current P/E of 39.6x is far higher than both the US Specialty Retail industry at 19.2x and its own fair ratio of 24.3x. That gap suggests meaningful valuation risk if sentiment or growth expectations cool.
For a closer look at what this price gap could imply for future returns, have a look at the See what the numbers say about this price — find out in our valuation breakdown.
Next Steps
If this mix of optimism and caution around Chewy leaves you unsure, take a closer look at the full risk and reward profile so you can judge it for yourself with 2 key rewards and 1 important warning sign.
Looking for more investment ideas beyond Chewy?
If Chewy has your attention but you want a wider watchlist, now is the time to line up a few more focused ideas that match your style.
- Target potential mispricing by reviewing companies that appear out of favour yet financially sound through the 49 high quality undervalued stocks
- Strengthen your income stream by assessing stocks that may offer robust yields and staying power using the 12 dividend fortresses
- Reduce portfolio stress by scanning for companies with steadier profiles and lower assessed risk in the 74 resilient stocks with low risk scores
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.
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