**Chewy’s Stock Decline and Future Outlook**
Chewy (NYSE: CHWY), the largest online pet retailer in the U.S., has seen its stock price drop over 70% from an all-time high of $118.69 in February 2021 to approximately $33 today. The company’s growth has slowed significantly in the post-pandemic market due to declining active customer numbers and increased competition, particularly from Amazon. In fiscal 2023, Chewy’s active customer base declined by 2%, while its annual revenue growth has decreased from 24% in FY 2021 to around 10% in FY 2023.
Despite these challenges, analysts project Chewy’s revenue and adjusted EBITDA to grow at compound annual growth rates (CAGR) of 7% and 23%, respectively, from fiscal 2024 to 2027. With an enterprise value of $12.8 billion, Chewy appears undervalued at 14 times next year’s adjusted EBITDA. If it achieves these targets and improves its valuation to 20 times its adjusted EBITDA, the company’s enterprise value could increase fivefold to $65.2 billion over the next decade.
