boytsov
After more than a year in the penalty box for slower growth and weaker consumer spending, Chewy (NYSE:CHWY) has been on a recent tear. Driven by both a combination of well-received earnings prints as well as being talked up by the meme stock pundit “Roaring Kitty,” Chewy is now up ~15% year to date.
Yet amid the sharp recent rise, we do have to ask ourselves: how much strength has already been priced in, and can the rally keep going?
I last wrote a bullish article on Chewy in March, when the stock was still trading at a mere ~$18 per share. I had argued at the time that a reasonable valuation, share buybacks, and expanding margins would help drive the stock toward a rebound. Since then, Chewy has skyrocketed more than 70%, obliging me to re-assess my previous thesis on this company.
Yes – it’s true that Chewy’s recent Q1 earnings print, released in late May, showed a very positive margin story….
