Chewy, Inc. (NYSE:CHWY) was featured on Mad Money as Jim Cramer shared his take on the stock amid a sliding macro environment. Cramer discussed the company’s quarter and the following market reaction, as he stated:
Yesterday morning, we got a solid set of results from Chewy, the online pet supply retailer, and the stock immediately jumped 13% in response, in part because it had been beaten down for the past 10 months, so it didn’t take all that much to generate a rebound… What really matters, though, is that Chewy gave solid guidance for the current quarter and a very bullish full year forecast…
You wouldn’t appreciate why this was a good quarter for Chewy if you only looked at the analyst reactions to the report, because most lowered their price targets… But honestly, I wouldn’t read too much into that… They were just using the quarter as an excuse to get their targets more in line with reality… The new average price target stands at $40 and change. That’s still up more than 50% from where the stock’s currently trading. Instead, I think Chewy’s 13% gain yesterday, which was followed by another 1.7% gain today in a really terrible market, was the right read on the quarter. This was a solid set of numbers from Chewy with a better outlook and, perhaps most importantly, a reaffirmation of the company’s long-term plan, which will lead to continued market share growth and steadily expanding profits.
Here’s the bottom line: I know Chewy’s had a rough run for the past six months, but here, with the stock selling for just 17 times this year’s earnings estimates, with this kind of growth, it’s the cheapest it’s ever been. I think you’re getting a great chance to do some buying even after yesterday’s big bounce. Chewy’s story remains firmly on track, and I bet yesterday’s move is merely the beginning of a longer and larger rally.
A laptop and a computer monitor display a detailed stock market technical analysis chart. Photo by Jakub Zerdzicki on Pexels
Chewy, Inc. (NYSE:CHWY) runs an online marketplace for pet food, supplies, medications, and health products, along with a range of pet services. We recently discussed CHWY while covering stocks investors are buying now. You can read about it here.
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.
READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.
Disclosure: None. Follow Insider Monkey on Google News.
Hedge Fund Resource Center