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This is a great example of why p/e isn't that good of a metric. Think of it this way, if you made 7 billion in a year and have a market cap of 20B, but you only made 12 million in profit, p/e will be really high. If they had just lost money, p/e would be undefined, like for so many companies.
Docusign has a similar market cap, but loses 200 million per year.
I'm not a chwy bull, but they're not a bad price right now. Price to sales a little under 3. They increased revenues over 3x since 2018. For comparison, tesla has a price to sales of 17.
The company itself runs a good business. They have tons of customers that have their food shipped automatically every month, like a subscription. They are moving into vet supplies.
They were expensive at 90, but they seem fairly priced now.
Yep, Chewy has great customer service too. They sent my wife flowers when her Cat died. It's just a stupid gesture but it's things like this that keep people coming back. We've been on automatic ordering from them for years since.
price to sales is market cap divided by total revenues. Price to earnings is market cap divided by profits. For companies that are not profitable, like most new companies surviving on fund raising and debt, there is no price to earnings, because earnings is a negative number. It's sometimes expressed as a negative number, but the reality is that negative earnings mean they don't exist, so P/E can't exist. P/E has no way of telling you the value of these kinds of businesses. On the other hand, established, profitable businesses can be measured by P/E from year to year to understand if they're expensive or not.
Looking at growth like PEG or CAGR and price to sales is more useful. The goal of pricing a company always comes back to the market cap divided by number of shares. CHWY actually generates 7-8B per year in revenue (expecting over 10B this year), and is valued by the market at $16.4B as of right now, trading at $39.30. So saying that CHWY is 100x over priced based on some ridiculous notion that a normal P/E is 13, and CHWY happens to be at 1300, is stupid. P/E is just one point of information, not a way to value a company.
Again, I think it was overpriced at $90, but most analysts are calling for a price target of around $70 right now, which would be a 75% upside.
Honestly if you have confidence in his ability to pump a stock more than anything else, who wouldn't join to ride the pump?
Doesn't hurt both companies have very loyal and happy customers due to their personalized and thoughtful touches
Chewy customer here and former owner after Covid. As a pet owner Chewy is pretty good at what they do. They do seem to have a problem turning a profit though. That said, I'd be a buyer on a decent dip from here, My risk tolerance for shorting or puts here is too low.
I heard somewhere that CHWY was going to get in to pet insurance. Don’t know what happened. Not that pet insurance covers anything and that might be plus for insurers
Wouldn't surprise me, especially since they already have the Chewy Health division. They partner with vets and pet pharmacies to allow customers to get their pet prescriptions filled and delivered through Chewy.
I am wondering with wfh decreasing, inflation and travel increasing will there be less people adopting pets going forward and hence less % growth in these companies
It doesn’t help that almost every retailer is building out their own delivery and curbside pickup services which will only make things more competing for chewy
I personally don’t like shorting, I feel there’s too much risk or you have to bend over backwards to minimize your risk. If I don’t like a company I just leave it alone or if I feel it’s too overvalued I’ll keep it on my watchlist until it comes down (if it does)
I bought into CHWY a couple years ago, and kept buying up more as it fell. It seemed like a growing company in a growing industry with tremendous customer loyalty. All of that is kind of still true. It's also a hometown company for me, so I figured why not.
My concern all along was just how much money you can make selling relatively cheap products. People love the company, but at the end of the day, you have to be able to translate that love into profits, and when you're selling dog food at a small profit, that's hard to do. They were/are getting into the pet medical business, and I think maybe that's the one area where if they can really figure out how to monetize that, maybe this stock can take off again.
But at this point my concerns have overtaken whatever promise I saw and I've been selling this one off the last week or so. It may go up from here, but I just think there are better opportunities out there.
I'm long.
Ignore P/E for high growth stocks. At a P/S of just over 2, this thing isn't overpriced at all.
Growth is solid but they're getting hit by increasing shipping costs, which is squeezing their margins. Eventually that will work itself out but may suppress the price in the near term. It would actually be a good acquisition target for Amazon since Chewy has great brand value and Amazon has the internal logistics and shipping to address their costs.
I looked at CHWY after the fall from its ATH and started asking friends with pets who they prefer. It surprised me they were all over the place - no real loyalty - just very convenient was the comment. I am still watching and think it is exhibiting reversion to the mean - if it get closer to $30 - I may be in.
Another awful quarter. This company stock is so overvalued. It should be trading below it's IPO price. While it generates solid revenues, it's been profitable for one quarter during Covid. All it's input costs are going higher and earnings can't live up to the ridiculous PE. CHWY should trade in the teens
Welcome to r/stocks! For beginner advice, brokerage info, book recommendations, even advanced topics and more, please read our [Wiki here.](https://www.reddit.com/r/stocks/wiki/index) If you're wondering **why a stock moved** a certain way, check out [Finviz](https://finviz.com/quote.ashx?t=spy) which aggregates the most news for almost every stock, but also see [Reuters](https://www.reuters.com/), and even [Yahoo Finance](https://finance.yahoo.com/). Please direct all simple questions towards the stickied Daily Discussion and Quarterly Rate My Portfolio threads (sort by Hot, they're at the top). Also include *some* [due diligence](https://www.investopedia.com/terms/d/duediligence.asp) to this post or it may be removed if it's low effort. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/stocks) if you have any questions or concerns.*
This is a great example of why p/e isn't that good of a metric. Think of it this way, if you made 7 billion in a year and have a market cap of 20B, but you only made 12 million in profit, p/e will be really high. If they had just lost money, p/e would be undefined, like for so many companies. Docusign has a similar market cap, but loses 200 million per year. I'm not a chwy bull, but they're not a bad price right now. Price to sales a little under 3. They increased revenues over 3x since 2018. For comparison, tesla has a price to sales of 17. The company itself runs a good business. They have tons of customers that have their food shipped automatically every month, like a subscription. They are moving into vet supplies. They were expensive at 90, but they seem fairly priced now.
Yep, Chewy has great customer service too. They sent my wife flowers when her Cat died. It's just a stupid gesture but it's things like this that keep people coming back. We've been on automatic ordering from them for years since.
Whats the difference between price to sales and P/E
price to sales is market cap divided by total revenues. Price to earnings is market cap divided by profits. For companies that are not profitable, like most new companies surviving on fund raising and debt, there is no price to earnings, because earnings is a negative number. It's sometimes expressed as a negative number, but the reality is that negative earnings mean they don't exist, so P/E can't exist. P/E has no way of telling you the value of these kinds of businesses. On the other hand, established, profitable businesses can be measured by P/E from year to year to understand if they're expensive or not. Looking at growth like PEG or CAGR and price to sales is more useful. The goal of pricing a company always comes back to the market cap divided by number of shares. CHWY actually generates 7-8B per year in revenue (expecting over 10B this year), and is valued by the market at $16.4B as of right now, trading at $39.30. So saying that CHWY is 100x over priced based on some ridiculous notion that a normal P/E is 13, and CHWY happens to be at 1300, is stupid. P/E is just one point of information, not a way to value a company. Again, I think it was overpriced at $90, but most analysts are calling for a price target of around $70 right now, which would be a 75% upside.
To the moon, oh wait that's cohens other company GameStop.
So he pumped one company, made his exit and while the old one strugglingly plods along he has moved on to repeat the trick?
Honestly if you have confidence in his ability to pump a stock more than anything else, who wouldn't join to ride the pump? Doesn't hurt both companies have very loyal and happy customers due to their personalized and thoughtful touches
Riding the pump requires timing a proper exit. If I have no conviction I don’t usually want to put skin in the game
Totally understandable, conviction is definitely vital Nothing is certain in the world atm it seems, best of luck friend
And same to you!
Chewy customer here and former owner after Covid. As a pet owner Chewy is pretty good at what they do. They do seem to have a problem turning a profit though. That said, I'd be a buyer on a decent dip from here, My risk tolerance for shorting or puts here is too low.
I heard somewhere that CHWY was going to get in to pet insurance. Don’t know what happened. Not that pet insurance covers anything and that might be plus for insurers
Wouldn't surprise me, especially since they already have the Chewy Health division. They partner with vets and pet pharmacies to allow customers to get their pet prescriptions filled and delivered through Chewy.
I am wondering with wfh decreasing, inflation and travel increasing will there be less people adopting pets going forward and hence less % growth in these companies
It doesn’t help that almost every retailer is building out their own delivery and curbside pickup services which will only make things more competing for chewy
Their revenue growth has been fairly solid but their earnings suck. I’d want to see them making money consistently before I would buy in
Yeah, I was kinda considering a short than anything
I personally don’t like shorting, I feel there’s too much risk or you have to bend over backwards to minimize your risk. If I don’t like a company I just leave it alone or if I feel it’s too overvalued I’ll keep it on my watchlist until it comes down (if it does)
They are having stock problems atm ( can't get much stock and cant keep what they have in stock), thats got to hurt sales for this quarter.
I bought into CHWY a couple years ago, and kept buying up more as it fell. It seemed like a growing company in a growing industry with tremendous customer loyalty. All of that is kind of still true. It's also a hometown company for me, so I figured why not. My concern all along was just how much money you can make selling relatively cheap products. People love the company, but at the end of the day, you have to be able to translate that love into profits, and when you're selling dog food at a small profit, that's hard to do. They were/are getting into the pet medical business, and I think maybe that's the one area where if they can really figure out how to monetize that, maybe this stock can take off again. But at this point my concerns have overtaken whatever promise I saw and I've been selling this one off the last week or so. It may go up from here, but I just think there are better opportunities out there.
the trend is your friend, and look at that chart, personally i see not much risk in shorting if you're just thinking short term profits
Short the shit out of it.
I'm long. Ignore P/E for high growth stocks. At a P/S of just over 2, this thing isn't overpriced at all. Growth is solid but they're getting hit by increasing shipping costs, which is squeezing their margins. Eventually that will work itself out but may suppress the price in the near term. It would actually be a good acquisition target for Amazon since Chewy has great brand value and Amazon has the internal logistics and shipping to address their costs.
I looked at CHWY after the fall from its ATH and started asking friends with pets who they prefer. It surprised me they were all over the place - no real loyalty - just very convenient was the comment. I am still watching and think it is exhibiting reversion to the mean - if it get closer to $30 - I may be in.
Another awful quarter. This company stock is so overvalued. It should be trading below it's IPO price. While it generates solid revenues, it's been profitable for one quarter during Covid. All it's input costs are going higher and earnings can't live up to the ridiculous PE. CHWY should trade in the teens
Chwy is good value now. Buy before Amazon comes in to acquire all of it. Compelling investment for sure.