In the latest trading session, Chewy (CHWY) closed at $21.53, marking a +1.51% move from the previous day. This move outpaced the S&P 500's daily loss of 0.51%. On the other hand, the Dow registered a loss of 0.2%, and the technology-centric Nasdaq decreased by 1.47%.
The stock of online pet store has risen by 19.36% in the past month, leading the Retail-Wholesale sector's gain of 0.51% and the S&P 500's gain of 0.53%.
The upcoming earnings release of Chewy will be of great interest to investors. The company's earnings per share (EPS) are projected to be $0.36, reflecting a 9.09% increase from the same quarter last year. In the meantime, our current consensus estimate forecasts the revenue to be $3.32 billion, indicating a 6.83% growth compared to the corresponding quarter of the prior year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $1.53 per share and revenue of $13.49 billion, indicating changes of +20.47% and +7.06%, respectively, compared to the previous year.
Investors might also notice recent changes to analyst estimates for Chewy. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.
Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.31% lower within the past month. Currently, Chewy is carrying a Zacks Rank of #5 (Strong Sell).
With respect to valuation, Chewy is currently being traded at a Forward P/E ratio of 13.88. For comparison, its industry has an average Forward P/E of 17.09, which means Chewy is trading at a discount to the group.
It is also worth noting that CHWY currently has a PEG ratio of 0.56. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. By the end of yesterday's trading, the Internet - Commerce industry had an average PEG ratio of 1.09.
The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 170, this industry ranks in the bottom 31% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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This article originally published on Zacks Investment Research (zacks.com).