Here's Why Chewy (CHWY) Fell More Than Broader Market

Chewy (CHWY) closed at $22.13 in the latest trading session, marking a -1.29% move from the prior day. The stock trailed the S&P 500, which registered a daily loss of 0.52%. Meanwhile, the Dow lost 0.51%, and the Nasdaq, a tech-heavy index, lost 0.32%.

The online pet store's shares have seen an increase of 7.12% over the last month, surpassing the Retail-Wholesale sector's gain of 3.74% and the S&P 500's gain of 3.3%.

The investment community will be closely monitoring the performance of Chewy in its forthcoming earnings report. The company's upcoming EPS is projected at $0.36, signifying a 9.09% increase compared to the same quarter of the previous year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.32 billion, up 6.83% from the year-ago period.

For the annual period, the Zacks Consensus Estimates anticipate earnings of $1.53 per share and a revenue of $13.49 billion, signifying shifts of +20.47% and +7.06%, respectively, from the last year.

Investors might also notice recent changes to analyst estimates for Chewy. Such recent modifications usually signify the changing landscape of near-term business trends. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed an unchanged state. At present, Chewy boasts a Zacks Rank of #3 (Hold).

In terms of valuation, Chewy is currently trading at a Forward P/E ratio of 14.68. This signifies a discount in comparison to the average Forward P/E of 19.07 for its industry.

Also, we should mention that CHWY has a PEG ratio of 0.59. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. CHWY's industry had an average PEG ratio of 1.16 as of yesterday's close.

The Internet - Commerce industry is part of the Retail-Wholesale sector. This industry, currently bearing a Zacks Industry Rank of 146, finds itself in the bottom 41% echelons of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Keep in mind to rely on Zacks.com to watch all these stock-impacting metrics, and more, in the succeeding trading sessions.

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research