Chewy Shares Plunge to 52-Week Low After Insider Stock Sale

Chewy, Inc. (NYSE: CHWY) shares reached a new 52-week low on February 2, 2024, following significant insider selling. The stock dipped to a low of $26.34 before recovering slightly to close at $27.08, with a trading volume of 9,784,045 shares. This marks a drop from the previous day’s close of $28.39, raising concerns among investors.

Chief Technology Officer Satish Mehta sold 13,013 shares in a transaction dated February 2, 2024, at an average price of $28.99. The total value of this transaction amounted to approximately $377,246.87. Post-sale, Mehta retains ownership of 273,835 shares, valued at about $7,938,476.65, reflecting a 4.54% reduction in his position. The transaction was recorded in a filing with the Securities and Exchange Commission (SEC), accessible through their official website.

Analysts Remain Optimistic Despite Stock Decline

Despite the recent downturn, several analysts maintain a positive outlook on Chewy’s future performance. Mizuho reaffirmed an “outperform” rating with a price target of $50.00 in a report published on November 4, 2023. Meanwhile, UBS Group set a price target of $51.00 on January 13, 2024. Goldman Sachs Group increased its price objective from $44.00 to $52.00 and designated the stock as a “buy” in a report dated December 11, 2023. Wedbush also assigned a price target of $42.00 with an “outperform” rating on December 10, 2023.

Overall, one investment analyst has labeled the stock as a “Strong Buy,” while sixteen others have given it a “Buy” rating, and four have assigned a “Hold” rating. According to MarketBeat.com, Chewy has an average rating of “Moderate Buy” and an average price target of $47.21.

Financial Performance and Institutional Interest

Chewy’s market capitalization stands at approximately $11.42 billion, with a price-to-earnings (P/E) ratio of 57.31 and a P/E growth (P/E/G) ratio of 1.82. The company’s beta is currently 1.59, indicating greater volatility compared to the market. Chewy’s recent earnings report, released on December 10, 2023, revealed earnings per share (EPS) of $0.32, surpassing analysts’ expectations of $0.31 by a notable $0.01. The company’s revenue for the quarter reached $3.12 billion, exceeding forecasts of $3.10 billion. This performance reflects an 8.1% year-over-year revenue increase, up from $0.20 EPS during the same quarter the previous year.

Institutional investors have shown significant interest in Chewy. In the third quarter, Quent Capital LLC acquired a new position in the company valued at about $27,000. CoreCap Advisors LLC increased its position by 306.3%, now holding 845 shares valued at approximately $28,000. Other notable investments include Osterweis Capital Management Inc., which purchased a new position worth around $30,000, and Princeton Global Asset Management LLC, which invested $40,000 in the third quarter. Currently, institutional investors hold 93.09% of Chewy’s stock.

Founded in 2011 by Ryan Cohen and Michael Day, Chewy has established itself as a leading e-commerce retailer specializing in pet food and supplies. The company offers a vast array of products for various pets, including dogs, cats, and small animals, as well as prescription medications and grooming essentials. Chewy’s platform aims to enhance customer experience through features like Autoship, allowing for regular deliveries of pet products.

As the market continues to react to insider selling and analysts’ ratings, Chewy’s future will depend on its ability to maintain revenue growth and manage investor confidence.