Stock surge of Chewy this week explained
Chewy Bounces Back After Earnings Report and Stock Market Sell-off
Chewy, the popular online pet retailer, has seen a resurgence in its stock price one week after a dip following its earnings report. The company, known for its customer satisfaction and wide range of pet-related offerings, has been on a growth trajectory, with an annualized growth rate of 10% over the last three years.
Chewy's impressive growth has made it a one-stop shop for pet owners, offering services such as the Chewy+ membership program, 12 Chewy Vet Care clinics, an heavily used autoship offering, and a growing list of private label products. The company also leads the market in pet pharmaceutical sales in the U.S.
Despite a temporary setback following the earnings report, where shares dropped due to conservative guidance, Chewy continues to maintain a strong position. The company's stock currently trades at $38.48, within the day's range of $37.98 - $38.60.
Chewy's stock has been under scrutiny, with some arguing that the sell-off was an overreaction. The company, with a market capitalization of $16 billion, has been actively repurchasing its shares, but there have been no clear reports of large new institutional buyers emerging recently.
The company's commitment to customer satisfaction has earned it the No. 1 spot on Forrester's Customer Experience Index. Chewy also ranked as the 29th top brand among millennials, according to Comparably.
Looking ahead, there is potential for Chewy's profit margins to rise, currently sitting at 28.49%. The company's stock, which has seen a 11% increase this week as of 1 p.m. ET on Friday, may continue to recover.
Investors will be keeping a close eye on Chewy as it continues to navigate the pet market and deliver for its loyal customer base.
