Chewy (CHWY) Stock; Trades Near Six-Month Lows as Investors Brace for Q3 Earnings

TLDRs;

• CHWY down 28% in six months; trades with high P/E and growth volatility.
• Investors expect $3.09B revenue and $0.30 EPS when Chewy reports Dec 10.
• Street mostly bullish; institutional buying offsets insider sales concerns.
• Recurring revenue, Chewy+, and pet health expansion support growth; valuation remains high.

As Chewy (NYSE: CHWY) approaches its fiscal Q3 2025 earnings report, the pet e-commerce giant finds itself navigating a complex mix of market sentiment, analyst expectations, and investor activity.

Trading around $33.47 at Friday’s close, the stock sits near the bottom third of its 52-week range  of $29.8–$48.6 representing a roughly 28% decline over the past six months. Despite this pullback, analysts continue to project potential double-digit upside, setting the stage for a pivotal week for investors.

Chewy, Inc., CHWY

Chewy Stock Performance and Market Context

Chewy’s recent trading range highlights a volatile period for the company. The stock’s trailing price-to-earnings ratio hovers near 95x, with a beta of about 1.6, reflecting a high-growth, high-volatility profile.

Over the past 30 days, shares are up 3.1%, but the 90-day performance shows a 17.5% decline, indicating that investor sentiment remains cautious.

TD Cowen maintains a Buy rating despite the decline, signaling confidence in Chewy’s operational execution even as the stock trades significantly below prior highs.

Q3 Earnings in Focus

Chewy will release its Q3 fiscal 2025 results before markets open on Wednesday, December 10, with a conference call scheduled for 8:00 a.m. ET.

Analysts anticipate net sales of $3.09 billion, a 7.5% increase year-over-year, and adjusted EPS of $0.30, up 50% from the same quarter last year. Segment forecasts include $2.16B in consumables, $335.8M in hardgoods, and $609M in other categories. Active customers are projected to rise to 21.1 million, with net sales per active customer climbing to $596.

Chewy’s prior quarter  set the benchmark with $3.10 billion in net sales, 30.4% gross margins, and adjusted EBITDA near 5.9%, reinforcing expectations for steady top-line growth and margin expansion. Management has raised full-year revenue guidance to $12.5 to $12.6 billion, signaling confidence in the second half of the fiscal year.

Analyst Ratings and Investor Sentiment

Analyst sentiment remains broadly bullish, with MarketBeat reporting a “Moderate Buy” consensus, StockAnalysis rating a “Strong Buy,” and retail-focused platforms echoing similar optimism.

Price targets for Chewy over the next 12 months range between $39 and $52, implying potential upside of roughly 35–38% from current levels. Institutions are actively increasing stakes; Invesco boosted its holdings by 34.7% in Q2, while hedge funds collectively control around 93% of Chewy’s float.

However, insider selling has continued, with the CEO and CTO liquidating shares in early December. While these sales are partly tax-driven, they add a layer of caution for investors interpreting market signals.

Growth Drivers and Risks

Chewy’s business fundamentals remain compelling for growth investors. The Autoship subscription program accounts for over 80% of sales, providing predictable recurring revenue. Gross margins are improving, and the Chewy+ membership program, despite a 61% annual fee increase, is expected to enhance customer loyalty and spending. Expansion into pet health services, including online pharmacy, insurance partnerships, and physical vet clinics, further diversifies revenue streams and margins.

Yet, risks persist. The stock trades at a historically high P/E, net margins remain thin at 1.2%, and competition from Amazon, Walmart, and other specialty retailers continues to intensify. Algorithmic models and technical indicators also suggest downside risk, forecasting potential declines if earnings or guidance disappoint.

The December 10 earnings call will be a decisive moment, as investors weigh revenue results, gross margin trends, active customer growth, and Chewy positive performance to determine whether the company’s growth story can overcome short-term valuation concerns and volatility.

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