1 Unmissable Reason to Get Hyped About Chewy Stock Today

Chewy Just Nailed the Pet Economy's Secret Sauce—And Wall Street's Sleeping

The numbers don't lie: this isn't just another e-commerce play. It's a subscription-driven cash machine in a sector that's practically recession-proof.

Forget the hype—this is about fundamentals meeting fur babies. While traditional retail stumbles, Chewy's autoship model locks in predictable revenue even when the market gets jumpy.

One cynical jab? If Wall Street understood loyalty beyond quarterly reports, they'd realize pets don't care about Fed rates—they just want their treats on time.

Chewy's burgeoning profit margins

Over the past two years, Chewy has become consistently profitable and cash-generative.

However, despite already recording a 2% net profit margin and a 4% free cash FLOW (FCF) margin (1.2% if you include stock-based compensation), the company's margins could keep rising as management focuses on the following higher-margin areas.

Autoship

Chewy's Autoship subscription plans account for 83% of total sales. This large base of Autoship sales means that most of Chewy's revenue is predictable, steady, and ripe for further streamlining.

Image source: Getty Images.

Chewy Vet Care

The company plans to have 20 Chewy VET Care clinics running by year's end. These clinics give the company a physical presence and also offer the higher margins that veterinary shops typically achieve.

Get Real

Chewy recently launched its own private-label healthy and fresh dog food, Get Real. This premium-priced product offers higher margins (particularly as a private label good) and ties in perfectly with Chewy's Autoship subscriptions.

Advertising

Chewy's sponsored ads business remains a major driver of the company's growing profitability. Management believes that these high-margin placements should one day grow to account for between 1% and 3% of total revenue.

Chewy+

The company's new $49 annual membership program, Chewy+, received a positive reaction following its launch. Chewy+ provides members with free shipping, 5% rewards on purchases, and exclusive offers. Chewy+ members already accounted for 3% of the company's June sales, and the program could generate substantial high-margin membership fees annually.

Trading at 29 times forward earnings -- but with these earnings potentially set to rise -- Chewy is a top stock to consider today.