Chewy, Inc. (CHWY): A Bull Case Theory

We came across a bullish thesis on Chewy, Inc. on wallstreetbets subreddit by Sliceofcheddarbtween. In this article, we will summarize the bulls’ thesis on CHWY. Chewy, Inc.'s share was trading at $34.66 as of September 12th. CHWY’s trailing and forward P/E were 96.28 and 28.09 respectively according to Yahoo Finance.

Chewy, Inc. (CHWY) is an online retailer specializing in pet food and animal pharmacy products, distinguished by its exceptional customer loyalty and service. The company’s auto-shipping model locks in repeat customers, creating a highly sticky user base, while price-matching with Amazon ensures competitiveness. Currently focused primarily on the U.S., with some presence in Canada, Chewy has significant international expansion potential, particularly in Europe, though progress in that region has been slower than anticipated.

The company has consistently grown revenue year-over-year and has maintained profitability for several years, reflecting the resilience of its business model. Its customer service approach, while costly and difficult to replicate with AI, reinforces loyalty and brand strength, potentially providing a competitive moat as rivals increasingly rely on automated solutions. Challenges include executive compensation levels that appear high relative to company size, the slow pace of European market entry, and the inherent costs of a service-intensive business model.

While these factors could pressure margins, they may also reinforce customer preference for Chewy over lower-service alternatives. The recent stock price decline offers an attractive entry point for long-term investors, given the company’s robust fundamentals, consistent revenue growth, and strong market positioning. The combination of a loyal, expanding customer base, pricing competitiveness, and potential international growth supports a positive outlook. Overall, Chewy presents a compelling investment opportunity, with solid downside protection from its entrenched U.S. operations and the potential for substantial upside if European expansion accelerates and operational efficiencies are realized, making the current valuation a potential discount relative to its long-term growth trajectory.

Previously we covered a bullish thesis on Coupang, Inc. (CPNG) by Brian Coughlin in April 2025, which highlighted the company’s vertically integrated logistics, customer-centric services, proprietary fulfillment network, and expansion into high-margin categories like luxury retail. The company's stock price has appreciated approximately by 51% since our coverage. The thesis still stands as Coupang continues domestic growth. Sliceofcheddarbtween shares a similar bullish perspective but emphasizes Chewy’s customer loyalty and auto-shipping model.

Chewy, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held CHWY at the end of the second quarter which was 55 in the previous quarter. While we acknowledge the potential of CHWY as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.