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It can be tough to gauge the current stock market. Growth stocks have come down massively from their highs, energy stocks have sought a return to glory, and defensive stocks are again in vogue. Inflation is soaring to levels not seen in 40 years and has proven to be much more tha

Telehealth company Hims & Hers Health (NYSE: HIMS) recently burst onto the healthcare scene, launching in late 2017 and conducting more than 5 million consultations with consumers in less than five years.

U.S. stocks rose on Tuesday even in the face of surging Treasury yields as a positive earnings reports helped investors shrug off potential risks from an aggressive rise in U.S. interest rates and the Ukraine war.

With its 5.2% annual yield, dividend investors have long viewed International Business Machines (IBM) as a great income-generating stock.

The top e-commerce company in South Korea, Coupang (NYSE: CPNG), has gone on a wild ride since making its public debut a little over a year ago. Initially, investors were thrilled with the stock, driving its price up nearly 100% on its first day of trading. But a year later, with

After both Amazon and Alphabet announced stock splits earlier this year, other companies splitting their shares have been generating lots of hype. That being said, stock splits don't change anything fundamentally for a business. A share of a company represents a piece of the pie,

If you're interested in broad exposure to the Large Cap Blend segment of the US equity market, look no further than the iShares Russell Top 200 ETF (IWL), a passively managed exchange traded fund launched on 09/22/2009.

The Fidelity MSCI Consumer Discretionary Index ETF (FDIS) was launched on 10/21/2013, and is a passively managed exchange traded fund designed to offer broad exposure to the Consumer Discretionary - Broad segment of the equity market.

Enterprises everywhere are migrating to the cloud or offering innovative cloud-based platforms and services. By 2025, over 95% of new digital workloads will utilize cloud-native platforms, according to Gartner. This is a tremendous increase over the 30% figure in 2021 and has som

Amazon.com Inc workers at a small facility in New Jersey have shown enough interest to hold a vote on unionizing, the U.S. National Labor Relations Board (NLRB) said on Monday.

Amazon.com Inc workers at a small facility in New Jersey have shown enough interest to hold a vote on unionizing, the U.S. National Labor Relations Board (NLRB) said on Monday.

Investors in the electric vehicle (EV) sector have closely followed Rivian Automotive (NASDAQ: RIVN) since its initial public offering (IPO) last fall. Shares soared following its public debut, with investors valuing the company at more than $100 billion before it produced a sing

U.S. stocks moved into positive territory in early afternoon trading on Monday, as a profit beat from Bank of America rounded out earnings season for the big Wall Street banks and added further momentum to financial stocks.

Netflix Inc is expected to report its slowest quarterly revenue growth in nearly eight years on Tuesday, but the focus will be on its forecast in the run-up to new seasons of popular titles including "Stranger Things" and "Ozark".

U.S. stocks fell on Monday as bond yields surged to three-year highs on expectations of an aggressive tightening in monetary policy, while financials rose after Bank of America rounded out earnings for big Wall Street banks with a profit beat.

Inflation is a hot topic. In this podcast, Motley Fool analysts Emily Flippen and Maria Gallagher also analyze Walmart's (NYSE: WMT) aggressive push to hire more full-time truckers, as well as:

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Invesco QQQ (Symbol: QQQ) where we have detected an approximate $2.0 billion dollar outflow -- that's a 1.1% decrease week over week (from 542,450,0

Online pet products retailer Chewy (NYSE: CHWY) recently faced several challenges following accelerated growth due to the rapid shift to online channels when the pandemic unfolded.  

Shares have tumbled 32.2% year-to-date amid a flight from growth to value stocks, inflation woes, disappointing Q4 FY21 results, and a weak outlook.

Financial Snapshot

Q4 FY21 (ended January 30, 2022) net sales grew 17% to $2.39 billion, lagging the Street’s forecast of $2.42 billion. Moreover, the company swung to an adjusted net loss per share of $0.11 from adjusted EPS of $0.11 in Q420. Analysts were expecting a smaller loss per share of $0.08.

Meanwhile, active customers as of December 31, 2021, grew 7.6% to nearly 20.7 million and net sales per active customer came in at $430, up 15.6% year-over-year.

Q4 FY21 results were adversely impacted by cost inflation, higher inbound freight costs, labor challenges due to Omicron, and the larger-than-anticipated impact from lost sales due to weakened supply chains.

Chewy’s Q1 FY22 net sales guidance of $2.4 billion-$2.43 billion also came in below analyst forecasts of $2.51 billion. Moreover, the FY22 net sales forecast of $10.2 billion-$10.4 billion implies growth in the range of 15%-17%, marking a deceleration from the 24.4% growth seen in FY21.  

Growth Strategies

Chewy is pursuing several initiatives to capture additional business, including increasing its penetration into the $35 billion pet healthcare market. The company’s healthcare efforts include Practice Hub (a veterinarian-only marketplace) and the launch of a suite of pet health insurance, wellness, and preventative plans.

Further, Chewy is gearing up to launch its membership program, Chewy Loyalty, in 2023 to drive customer engagement. It will also be introducing sponsored ads on Chewy.com, which will enable its suppliers to advertise to the company’s 21 million active customers.

Wall Street’s Take

Following investor meetings with Chewy’s management, JPMorgan analyst Doug Anmuth noted that despite some near-term "choppiness" related to COVID, the economic reopening, and cost inflation, management was confident it would drive revenue and customer growth, margin expansion, and new initiatives over the next few years.

Anmuth projects 16% revenue growth in FY22 and expects active customer growth to reaccelerate toward the end of 2022.

Based on his optimism, Anmuth reiterated a Buy rating on Chewy with a $55 price target.

Other analysts on the Street are cautiously optimistic, with a Moderate Buy consensus rating that breaks down into 10 Buys, seven Holds, and one Sell. Given the significant dip in the stock price, the average Chewy price target of $59.53 implies 49.09% upside potential from current levels.

Conclusion

Though the addressable market for pet products and related services is huge, Chewy is facing intense competition from several players, including e-commerce giant Amazon (AMZN). Several analysts seem to be treading cautiously as growth investments, soaring inflation, and supply-chain issues are expected to impact the company’s profitability this year.

Further, TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (NYSE: SEMR), indicates that the total estimated visits to Chewy’s website have declined 34.64% sequentially in Q122.

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