Is CHWY a good stock to buy? We came across a bullish thesis on Chewy, Inc. on Bruce’s Substack by Bruce Winder’s Double Click. In this article, we will summarize the bulls’ thesis on CHWY. Chewy, Inc.’s share was trading at $20.40 as of June 9th. CHWY’s trailing and forward P/E were 38.75 and 13.89 respectively according to Yahoo Finance.
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Chewy, Inc., together with its subsidiaries, engages in the e-commerce business in the United States. It offers pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services. CHWY delivered a strong Q4 fiscal 2025 performance, reinforcing its transition into a structurally profitable digital pet ecosystem platform. Net sales were $3.26 billion, broadly flat due to last year’s extra week, but underlying demand remained resilient with continued share gains.
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Profitability improved sharply, with operating income of $42.5 million versus a prior-year loss and net income up 72% to $39.2 million. For full year 2025, revenue grew 6–8% to $12.6 billion, while adjusted EBITDA rose 26% to $719 million, driven by operating leverage and gross margin expansion from mix shift toward health, advertising, and disciplined promotions.
Chewy’s ecosystem is anchored by 21.3 million active customers, up 4%, and a sticky autoship model representing over 83% of sales, reinforcing recurring revenue visibility. NSPAC rose to $591, while gross margins expanded to 29.8%, reflecting stronger monetization. The company generated record free cash flow of $562 million and ended the year debt-free with $1.7 billion liquidity, enabling buybacks and reinvestment.
Strategically, Chewy is scaling high-value growth drivers including Chewy Vet Care, a fast-expanding clinic network that boosts retention and lifetime value, and Chewy Made private label, which should enhance margins and customer loyalty. AI deployment across search, service, and fulfillment is expected to deliver tens of millions in cost savings and improve SG&A leverage into 2026.
Management guides for 8–9% revenue growth and EBITDA margin expansion to 6.6–6.8%, implying continued earnings acceleration. With stable industry demand, expanding margins, and multiple compounding growth vectors, Chewy is positioned for sustained long-term value creation.
Previously, we covered a bullish thesis on Coupang, Inc. (CPNG) by Brian Coughlin in April 2025, which highlighted its vertically integrated logistics moat, Rocket WOW ecosystem, and AI-driven fulfillment scale in e-commerce. CPNG’s stock price has depreciated by approximately 25.61% since our coverage. Bruce Winder’s Double Click shares a similar view but emphasizes Chewy’s recurring autoship ecosystem and margin expansion through AI-led efficiency and private brand growth.
Chewy, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held CHWY at the end of the first quarter which was 56 in the previous quarter. While we acknowledge the risk and potential of CHWY as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CHWY and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
