In the latest trading session, Chewy (CHWY) closed at $27.52, marking a +2.04% move from the previous day. This move outpaced the S&P 500's daily gain of 1.2%. Meanwhile, the Dow gained 1.79%, and the Nasdaq, a tech-heavy index, added 1.52%.
The stock of online pet store has risen by 11.08% in the past month, leading the Retail-Wholesale sector's gain of 6.55% and the S&P 500's gain of 5.15%.
The upcoming earnings release of Chewy will be of great interest to investors. In that report, analysts expect Chewy to post earnings of $0.43 per share. This would mark year-over-year growth of 22.86%. Alongside, our most recent consensus estimate is anticipating revenue of $3.36 billion, indicating a 7.84% upward movement from the same quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $1.61 per share and a revenue of $13.69 billion, representing changes of +26.77% and +8.61%, respectively, from the prior year.
Investors should also note any recent changes to analyst estimates for Chewy. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 9.39% higher. Chewy currently has a Zacks Rank of #1 (Strong Buy).
Looking at valuation, Chewy is presently trading at a Forward P/E ratio of 16.72. This represents a discount compared to its industry average Forward P/E of 16.86.
One should further note that CHWY currently holds a PEG ratio of 0.64. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Internet - Commerce industry stood at 0.93 at the close of the market yesterday.
The Internet - Commerce industry is part of the Retail-Wholesale sector. With its current Zacks Industry Rank of 152, this industry ranks in the bottom 38% 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).