Chewy (CHWY 2.06%) stock was a pandemic darling. The online pet supply retailer became popular with shoppers as consumers had to cope with lockdowns. That momentum took its stock to an intraday high of $120 per share five years ago.
However, investors sold the stock off as pandemic restrictions eased and many consumers returned to their old shopping habits. Still, the growth never completely stopped, and Chewy has expanded into new business lines, helping it increase its profitability.
Are such improvements enough to get the retail stock back to $100 per share? Let's take a closer look.
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Chewy's growth path
Chewy initially attracted a following by not only matching competitors like Amazon on price but also emphasizing a level of customer service that companies like Amazon tend not to provide.
Also, with a $10 billion market cap, it is less than 0.5% of Amazon's size and serves a more specific market than the e-retailing giant. Thus, one cannot expect Chewy to establish a business comparable to AWS.
Still, that has not stopped Chewy from expanding into new areas. The company now sells pharmaceuticals for pets, and the site offers pet telehealth services.
Such offerings allowed it to generate more than $9.3 billion in sales in the first nine months of fiscal 2025 (ended Nov. 2, 2025), an 8% increase from year-ago levels. It also kept cost and expense growth in check, allowing for operating income to grow by 74% yearly during that period.
That kind of increase might prompt investors to buy. Unfortunately, an income tax benefit in 2024 skewed net income higher in that year, meaning the $184 million in comprehensive income for the first three quarters of fiscal 2025 fell from last the year before. That took its net margin for the period to 2%, down from 4.3% the year before.
Moreover, Chewy is not immune to economic concerns. Consequently, the stock sold off over the last year.
NYSE: CHWY
Key Data Points
However, the P/E ratio of 55 is expected to give way to a forward P/E ratio of 17. That forward valuation is low enough that it could help draw investors back into Chewy stock.
Is Chewy going to $100?
Given Chewy's improving growth, the stock should move higher over time, but investors should not expect it to reach $100 per share anytime soon.
Indeed, Chewy is an innovative retailer, and at a 17 forward P/E ratio, it may be undervalued to the point that it could outpace the S&P 500, likely making it worth a second look.
Nonetheless, retailing is a low-margin business, meaning it is unlikely to maintain outsize profit growth over time. Also, while Chewy's single-digit revenue growth is respectable, that is likely not enough growth to quadruple its stock price in the foreseeable future.
