Chewy.com (NYSE:CHWY) is a relatively young public company, going public over the summer of 2019. And even though its price is up nearly 140% in that period, it is unlikely that it has made any millionaires in the process just yet. That doesn't mean it cannot make some in the future.

The company is growing at a phenomenal rate, and the recent surge in pet ownership during the pandemic will only add fuel to the fire. But let's take a closer look at Chewy.com to see if it has what it takes to be a millionaire-maker stock. 

A puppy toying with a laptop computer.

Image source: Getty Images.

Prospects 

Impressively, over its previous six quarters, Chewy has reported revenue growth of over 40% in five of them. The company was already a fast-growing business before the pandemic, but as with other e-commerce companies, the pandemic fueled an increase in sales. People are showing they are preferring to order pet supplies online rather than purchase in-store. Moreover, they like the option to automate the process, which saves time and ensures they do not forget Rover's favorite treat during a shopping trip.

Indeed, a significant portion of the company's revenue is of the recurring type. In the most recent quarter, 69.2% of overall sales came from Autoship, a feature that allows customers to request a bag of dog food to be delivered to their home every four weeks. This will help the company in two ways -- first, by removing a critical part of the buying process and making it automatic. Second, it helps the company with inventory planning and fulfillment by knowing more accurately how much supply it needs and where it will need to be delivered. It will help the company reduce inventory and fulfillment costs.

Additionally, pet ownership is a long-term commitment for most people. Customers acquired today have the potential to remain customers for a decade or longer. And people signed up for the autoship feature will have to face some friction if they want to switch to a different provider of pet supplies. A high cost of switching can be a competitive advantage. 

The company currently boasts 17.8 million active customers and projects that each customer will spend an average of $700 per year within five years of signing up.  

Valuation

Chart of Chewy.com's price to sales ratio and EV to revenues

Data source: YCharts.

Even though the company is selling at a price-to-sales ratio near its record highs, it is priced relatively fairly when you consider the remarkable growth in revenue the company is delivering. Moreover, rapid growth has allowed it to reach enough scale to report three consecutive quarters of positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

Overall, the company's potential to continue growing revenue over the next five years and its relatively fair valuation means it certainly could be a millionaire-maker consumer goods stock for those who buy and hold it for the long run. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.