Core Viewpoint - Growth stocks have been a significant driver of market performance over the past three years, but many are now considered overpriced, making it essential to evaluate individual companies for fair valuations [1] Company Overview - Chewy is the leading e-commerce provider for pet supplies, known for its strong customer loyalty [5] - The company has a net sales retention rate exceeding 100%, indicating that customers tend to spend more in subsequent years [6] Financial Performance - Chewy's Autoship program accounted for 84% of its sales in Q3 2025, allowing for predictable sales and improved inventory management [7] - The company achieved a 5.4% adjusted EBITDA margin over the trailing 12 months, with a long-term target of a 10% margin [7] Growth Opportunities - Chewy's expansion into pet healthcare, insurance, and advertising is expected to enhance margin growth and customer loyalty [8] - The integration of these services with core retail operations allows for higher-margin sales without significantly increasing operating expenses [8] Revenue and Earnings Projections - Chewy is expected to achieve solid revenue growth in the high single digits, with earnings projected to grow at 23% year-over-year [9]

Core Insights - Pet insurance can alleviate financial burdens from unexpected veterinary bills, and discounts can make these plans more affordable [1][21] - The analysis of 30 pet insurance plans identified the best discount opportunities available from various insurers [1][21] Group 1: MetLife Pet Insurance - MetLife is rated the highest for pet insurance discounts, offering a multi-pet discount of up to 5% and the ability to combine cats and dogs under one plan with shared deductibles [3][4] - Additional discounts include military, online purchase, first responders, healthcare workers, and affinity group discounts, along with a disappearing deductible that reduces the deductible by $50 for each claim-free year [4][8] - Average costs for coverage are $81.05/month for $5,000 and $128.59/month for $10,000, both with a $500 deductible and 90% reimbursement [8] Group 2: Lemonade Pet Insurance - Lemonade offers a multi-pet discount of up to 10% and a discount for paying the policy premium in full, with average rates being the second-lowest in the analysis [9][11] - Discounts are also available for bundling with other Lemonade insurance policies, such as auto or home insurance [9][11] - Average costs for coverage are $63.96/month for $5,000 and $72.81/month for $15,000, both with a $500 deductible and 90% reimbursement [18] Group 3: Liberty Mutual Pet Insurance - Liberty Mutual provides a multi-pet discount of up to 10% for three or more pets and allows stacking of military and multipolicy discounts [11][13] - The average cost for $5,000 annual coverage is $56.96/month, making it the lowest among the evaluated insurers [13][15] - Discounts are available for annual payments and bundling with other insurance types [13][15] Group 4: Chewy Pet Insurance - Chewy's Lemonade plan offers discounts of up to 10% for multiple pets and a 10% discount for bundling with other Lemonade insurance policies [15][19] - Average costs for $5,000 annual coverage are $63.96/month, with a $500 deductible and 90% reimbursement [18] - Chewy's Trupanion plan received lower ratings due to fewer discount options [15] Group 5: USAA Pet Insurance - USAA offers exclusive discounts for military members, including a 10% discount for service dog owners and a multi-pet discount of up to 10% [20][24] - Average costs for $5,000 annual coverage are $67.05/month, with a $500 deductible and 90% reimbursement [24] - USAA's plans are available only to military members, veterans, and their immediate family [20] Group 6: General Insights on Discounts - Discounts for pet insurance vary widely among insurers, with common types including multi-pet, bundling, and military discounts [21][26] - Many insurers allow stacking of discounts, which can significantly reduce overall premiums [21][26] - The analysis indicates that over one-third of pet owners have multiple pets, making multi-pet discounts a valuable consideration [22][26]

Core Viewpoint - Chewy's stock has declined approximately 17% since the announcement of CTO Satish Mehta's retirement, and over 30% since the second-quarter results were reported in September, raising concerns among investors about leadership stability [1][2]. Group 1: Leadership Changes and Market Reaction - The recent leadership turnover, including the exit of the CFO last year, is viewed negatively by investors seeking stability [1][2]. - The stock's decline reflects investor apprehension regarding the company's direction amidst these changes [1]. Group 2: Revenue Streams and Growth - Chewy's Autoship program is a significant revenue driver, with 84% of net sales generated through this subscription service, providing a stable revenue stream [2][3]. - Revenue from Autoship increased by 13.5% in Q3, while total sales growth of 8.5% outpaced the broader industry [3]. - The company is expanding its active customer base and net sales per active customer by 5% each, indicating strong growth [4]. Group 3: Profitability and Business Model - The repeat-purchase model enhances profitability as it incurs no additional acquisition costs, contributing positively to the bottom line [4]. - Chewy's pet pharmacy leads the U.S. market by prescription volume, with a focus on scaling this higher-margin business to improve overall profitability [5]. - In Q3, gross and adjusted EBITDA margins expanded by 50 and 100 basis points, respectively, reflecting improved financial performance [5]. Group 4: Investment and Expansion Plans - Chewy is utilizing its subscription revenue to fund growth initiatives, including its rollout in Canada and entry into pet care through Chewy Vet Care clinics [6]. - The company opened two new locations in Q3, bringing the total to 14, supported by a $675 million cash reserve and zero debt, allowing for capital investment in new opportunities [7].

Core Viewpoint - Chewy Inc (NYSE:CHWY) is considered a strong e-commerce investment, with Piper Sandler maintaining an Overweight rating and setting a price target of $48.00, influenced by concerns regarding pet ownership and BC Partners' significant stake [1] Group 1: Earnings and Guidance - Chewy Inc's 2025 earnings are expected to align more closely with consensus expectations, showing only a 3% EBITDA beat year-to-date compared to a 22% average beat in 2024 [2] - The company is anticipated to adopt a conservative approach for 2026, guiding for 7-8% sales growth against the Street's expectation of 8% [2] - Chewy is likely to maintain a consensus EBITDA margin of 6.6%, with potential upside from improved leverage [2] Group 2: Market Sentiment and Price Targets - Morgan Stanley raised its price target for Chewy Inc to $51 from $48 while keeping an Overweight rating, suggesting a positive outlook for 2026 in the internet sector [3] - Goldman Sachs also sees long-term upside for Chewy, raising its target to $52 [7] Group 3: Company Overview - Chewy Inc operates as an online retailer specializing in pet food and related products, offering a range of services including Chewy Pharmacy and veterinary connections [4]

Core Viewpoint - Chewy's stock has experienced significant volatility, but the company has maintained revenue growth, positioning it as a potential value stock for investors [1][10]. Company Performance - Chewy has successfully differentiated itself from competitors like Amazon through superior customer service and competitive pricing, which contributed to its stock price surge during the pandemic [3]. - Despite the stock price decline in 2021, Chewy has continued to grow, expanding its business model to include veterinary telehealth services and pharmaceuticals for pets [4]. Financial Metrics - In the first nine months of fiscal 2025, Chewy reported revenue of $9.3 billion, an 8% increase year-over-year, while operating income rose to $212 million, a 74% increase from $122 million in the same period of fiscal 2024 [5]. - Analysts project revenue growth of 6% for the current fiscal year and 8% for fiscal 2027, which may exert downward pressure on valuation metrics if the stock remains stagnant [6]. Valuation Insights - Chewy's market capitalization stands at $12 billion, with a current price-to-sales (P/S) ratio of 0.9, down from a peak of 7 in 2021, indicating a significant drop in valuation [8]. - Although the price-to-earnings (P/E) ratio is 55, the forward P/E ratio of 17 suggests that the stock may be undervalued, especially given the company's ongoing financial improvements [9]. Investment Consideration - After a prolonged period of decline and stagnation, Chewy stock may be poised for recovery, making it an attractive investment opportunity before broader market recognition of its growth and low valuation [10][11].

Group 1: Amazon (AMZN) - Amazon's stock has declined by 9% at the start of the year, but this has not deterred smart money as indicated by volatility skew analysis [1] - For the March 20 expiration, the volatility skew shows elevated call implied volatility (IV) compared to puts, indicating a focus on upside volatility protection [8] - The Expected Move calculator projects a price range for AMZN between $194.94 and $225.71, with a probability density peak near $212 [10][11] Group 2: Chewy (CHWY) - Chewy's stock has dropped over 15% since January, with a different volatility skew profile compared to Amazon, focusing on downside risk management [13] - The skew indicates that put IV is higher than call IV, reflecting demand for insurance against tail risk, while also suggesting potential upside tail risk [14][15] - The Expected Move calculator estimates a price range for CHWY between $24.88 and $31.16, with a probability density peak near $32 [16][17] Group 3: Expedia Group (EXPE) - Expedia's stock is down more than 16% year-to-date, and while labeled a Weak Buy, the volatility skew presents an interesting setup [18] - The skew shows elevated put IV at lower strike prices, indicating a concern for downside protection, while call IV rises at higher strikes, suggesting potential upside risk [19][20] - The Expected Move calculator projects a price range for EXPE between $207.55 and $266.15, with a probability density peak around $262 [21][22]

Core Insights - Morgan Stanley raised its price target on Chewy to $51 from $48 while maintaining an Overweight rating, indicating confidence in the company's growth potential and operational leverage [1] - Chewy reported net sales of $3.12 billion for Q3 2025, reflecting an 8.3% year-over-year growth, surpassing management's guidance [3] - The company is diversifying its offerings, with Chewy Vet Care emerging as a significant growth driver, supported by the opening of two additional veterinary practices [3][4] Company Overview - Chewy, Inc. is a leading online retailer of pet food and related products, founded in 2011 and headquartered in Plantation, Florida [4] - The company's expanding ecosystem now includes healthcare services, positioning it to capture a larger share of pet spending and enhance customer loyalty [4] Market Context - The North America Internet sector is expected to favor companies demonstrating meaningful returns on invested capital, particularly those utilizing GenAI or GPU technologies [1] - Chewy stands out in this context as it shows improving operational leverage and clearer pathways to value creation amidst competitive pressures in other internet subsectors [1]

Core Viewpoint - Chewy's stock has significantly declined over the past five years, dropping more than 80% from its peak in early 2021, but there are signs that the company's long-term strategy is beginning to pay off, making it a potentially attractive investment opportunity [1][2]. Group 1: Company Overview - Chewy is an online retailer specializing in pet food, toys, treats, and medicine, operating solely as an e-commerce platform without any physical retail presence [2]. - The company competes with Amazon in the online pet supply market, holding approximately one-third market share, similar to Amazon's share [3]. Group 2: Financial Performance - In the fiscal third quarter, Chewy reported revenue of $3.1 billion, reflecting an 8.3% year-over-year increase, continuing a consistent growth trend [3]. - A significant portion of Chewy's revenue, 83.9%, came from subscription-based recurring shipments, up from 80% in the same quarter the previous year, indicating a growing customer base willing to spend nearly $600 annually [5][6]. Group 3: Profitability and Growth Potential - Chewy has transitioned from a loss-making position to profitability at a faster rate than its revenue growth, suggesting a sustainable shift towards positive earnings [4]. - The company's ability to retain customers through subscription services is expected to drive continued bottom-line growth, as it is more cost-effective to maintain existing customers than to acquire new ones [6].

Chewy - Chewy is an e-commerce pet retailer with a recession-resistant business model, currently valued at a forward P/E multiple of 18.5 times fiscal 2026 estimates [2] - The company has a market capitalization of $11 billion, with a current stock price of $27.09, and has seen a revenue increase of over 8.5% in the first nine months of its fiscal year [3][4] - More than 80% of Chewy's sales come from auto-ship customers, contributing to its stable business model [4] - Chewy is experiencing gross margin expansion through high-margin sponsored ads, a new paid membership program, and higher-margin private label brands, which can have gross margins up to 700 basis points higher than national brands [5] Dutch Bros - Dutch Bros is a rapidly growing coffee chain with a market capitalization of $6.8 billion and a current stock price of $53.49, benefiting from strong same-store sales growth of 5.7% in its third quarter [6][7] - The company is introducing hot food items, which have shown a 4% lift in comparable-store sales during early pilots, and plans to roll these out to about 75% of its locations [7] - Dutch Bros aims to expand from fewer than 1,100 locations to 2,029 by 2029, with a potential to support around 7,000 locations across the U.S., fully funding its expansion through free cash flow [8]

Core Viewpoint - Ryan Cohen is attempting to transform GameStop into a conglomerate akin to Berkshire Hathaway, drawing comparisons to Warren Buffett's early career moves, despite significant differences in their investment training and backgrounds [5][19]. Group 1: Ryan Cohen's Investment Background - Ryan Cohen's investment journey began after selling Chewy for $3.35 billion in 2017, netting him approximately $1 billion, which he invested primarily in Apple and Wells Fargo stocks [7][9]. - Cohen co-founded Chewy, which became the leading online specialty pet products retailer, growing the U.S. pet industry from $48 billion in 2010 to $70 billion in 2017, with projections of $150 billion by 2024 and $350 billion globally [10][11]. Group 2: GameStop's Financial Position - GameStop's standard deviation was 2.81, placing it among the top 100 bullish price surprises, indicating high volatility and investor interest [5][6]. - The company has undergone significant changes, including a reduction in store count from 4,816 in January 2021 to approximately 2,733 by January 2026, a 43% decrease [15]. - GameStop's long-term debt increased from $14.9 million to $4.16 billion following share offerings and convertible notes, while cash and short-term investments rose from $1.08 billion to $8.83 billion [17]. Group 3: Investment Strategy and Future Outlook - Cohen's strategy involves leveraging the meme stock phenomenon to raise cash for potential acquisitions, with a focus on transforming GameStop into a more profitable entity [14][18]. - Michael Burry suggests that Cohen's acquisition of GameStop stock is a strategic move to position the company for a significant acquisition that could enhance future cash flow [18]. - The tangible book value of GameStop is currently at 2.2x, with expectations that it will double, indicating an aggressive growth outlook [18].