Down nearly 20% to start the year, the drop in share price for Chewy's (CHWY +4.69%) stock looks like it could be a gift for long-term investors. In fact, it looks like one of the most attractively valued growth stocks in the consumer space.

Let's look at three reasons to buy the stock for the long term.

1. An operating leverage story

What differentiates e-commerce companies like Amazon and Chewy from brick-and-mortar retailers is that they tend to have more levers to pull to achieve strong operating leverage. Revenue growth is only half the story in retail, and operating leverage is when companies can grow their profits much more quickly than their revenue.

Chewy is creating operating leverage in a few ways. It's still ramping up a new state-of-the-art fulfillment center and using artificial intelligence (AI) to become more efficient. It's also been leaning into higher-gross margin businesses, including private-label pet food, sponsored ads, vet care services, and pet pharmacy. It is also testing a paid membership program.

The company saw its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margins grow by 90 basis points last year to 5.7%, which led to a 26% adjusted EBITDA growth to $719 million. It is expecting adjusted EBITDA margins to expand another 100 basis points this year and for its adjusted EBITDA to climb around 27% to between $900 million and $930 million. The company has a long-term target on 10% adjusted EBITDA margins, which would provide a lot of growth in the coming years.

Image source: The Motley Fool.

2. A defensive business

Chewy has one of the most recession-resistant business models in retail. Nearly 70% of its sales last year came from consumables like pet food, while another 16% came from pet health and specialty products. On top of that, 84% of its sales last quarter came from customers who are part of its autoship program.

Chewy's average customer is spending nearly $600 a year, mostly on pet food and other pet necessities, that are automatically shipped to their homes without them having to even place an order. These types of recurring business models are valuable and tend to trade at premiums.

The stock is on sale

Despite Chewy's recession-resistant, highly recurring business model and strong sales and profitability growth, the stock is in the bargain bin. It trades at a forward P/E of below 17 times this year's analyst estimates, which is a huge discount to defensive brick-and-mortar retailers like Walmart and Costco, which have multiples over 40 times. Meanwhile, it's growing its revenue at a quicker pace and seeing huge profitability growth (both EBITDA and operating income).

Take it all together, and this stock is a buy.