Chewy Is Down 23% in 2026. Is This a Once-in-a-Lifetime Buying Opportunity?

The banal marketplace got disconnected to a bully commencement this year, but it dropped pursuing the commencement of the Iran war. The S&P 500 scale mislaid 1% from the extremity of 2025 done March 11.

Individual stocks person performed some amended and worse, of course. Chewy (NYSE: CHWY) falls into the second category, its stock terms having dropped astir 23% this year.

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A crisp banal terms diminution doesn't mean you should unreserved retired and bargain the shares, however. It's important to look astatine Chewy's semipermanent fundamentals and valuation earlier making that determination.

Chewy hasn't been successful beingness for precise long. It started successful 2011.

The institution sells favored products, supplies, and prescriptions solely online. Revenue was increasing astatine a bully clip earlier the commencement of the COVID-19 pandemic, but the complaint accelerated aft favored adoption soared erstwhile radical were forced to enactment home.

Chewy's gross went from $4.8 cardinal successful fiscal 2019 (ended Feb. 2, 2020) to $10.1 cardinal successful fiscal 2022 (ended Jan. 29, 2023).

Naturally, this maturation proved unsustainable arsenic people's lives returned to greater normality. Still, absorption has focused its attraction connected lawsuit retention and additions, and it's producing coagulated gross gains.

Active customers (those who ordered a merchandise oregon work wrong the past year) grew 4.9% twelvemonth implicit twelvemonth successful the 3rd 4th of fiscal 2025 (ended Nov. 2, 2025) to 21.2 million. Importantly, income per progressive lawsuit accrued by the aforesaid percentage, to $595.

Revenue from Chewy's recurring transportation service, which helps clasp loyal customers and provides a unchangeable gross source, continued to rise, gaining 13.6% to $2.6 billion. Chewy produced solid, if not spectacular, gross maturation of 8.3%.

It surely looks similar Chewy is moving successful the close direction. However, contempt this year's terms drop, the shares inactive look richly valued.

The banal has a price-to-earnings (P/E) ratio of 52. While that's down from 68 astatine the extremity of 2025, it's inactive expensive. Using the S&P 500 arsenic a proxy for the market, the scale has a P/E aggregate of 29.

The market's valuation reflects high-growth net expectations. Can Chewy conscionable them?

Perhaps Chewy's gross maturation volition accelerate arsenic it pursues maturation initiatives similar opening its ain veterinarian clinics, which absorption stated person gotten disconnected to a bully start.