Why Chewy Stock Is Soaring This Week

Key Points

• Chewy's shares have rebounded following last week's sell-off after earnings.

• While its guidance was conservative, the company looks stronger than ever operationally.

• Chewy's long-term potential far outweighs the 90 days' worth of slightly negative data it presented last week.

• 10 stocks we like better than Chewy ›

Shares of leading pet goods e-commerce juggernaut Chewy (NYSE: CHWY) are up 11% this week as of 1 p.m. ET on Friday, according to data provided by S&P Global Market Intelligence.

Chewy reported earnings last Wednesday, Sept. 10, and immediately saw its shares drop after it offered up guidance that traders deemed was too conservative.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

At that time, I argued that the sell-off seemed to be an overreaction and that the company's underlying business looked stronger than ever. One week later, Chewy's stock has bounced back on minimal news, so perhaps long-term investors have turned the tide against short-term traders selling due to 90 days' worth of information.

Chewy: Building the strongest pet care ecosystem

The primary reason that I am confident in Chewy's stock to succeed over the coming decades is the potential for its profit margins to rise. However, Chewy also offers numerous qualitative factors that make it an outstanding stock to consider, alongside its improving financials.

First off, Chewy ranked as the 29th top brand among millennials, according to Comparably. Landing at the No. 1 spot on Forrester's Customer Experience Index, Chewy and its willingness to go above and beyond for its customers and their furry friends shine through.

Image source: Getty Images.

This customer satisfaction creates an immensely loyal base of patrons to build an ecosystem around.

Home to the Chewy membership program, 12 Chewy Vet Care clinics, a heavily used autoship offering, the most pet pharmaceutical sales in the U.S., and a growing list of private label products, the company has quickly become a one-stop shop for pets.

Trading at 30 times forward earnings, Chewy's rising margins, budding ecosystem, and 10% annualized growth rate over the last three years look attractively valued.

Should you invest $1,000 in Chewy right now?

Before you buy stock in Chewy, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Chewy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $651,345!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,080,327!*

Now, it’s worth noting Stock Advisor’s total average return is 1,058% — a market-crushing outperformance compared to 189% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 15, 2025

Josh Kohn-Lindquist has positions in Chewy. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy.