Read This Before Buying Chewy Stock​

• Chewy boosted its gross and nett net margins portion offering much than 130,000 favored products.

• Its enlargement into high-margin concern categories is commendable, but the full favored manufacture is known for debased margins.

• A precocious valuation and constricted opportunities to grow nett net margins whitethorn mean it's amended to enactment connected the sidelines.

• 10 stocks we similar amended than Chewy ›

Chewy (NYSE: CHWY) leverages e-commerce to boost income for much than 130,000 favored products, but that hasn't been capable to reward semipermanent investors. The banal is down by implicit 70% implicit the past 5 years, which justifies caution.

The banal illustration shows however rapidly a banal tin suffer value, but Chewy is making advancement down the scenes. Revenue grew twelvemonth implicit twelvemonth successful Q3 2025, and profits grew astatine a faster rate. It's a bully sign, but present are immoderate things to see earlier buying Chewy stock.

Chewy reported 8.3% year-over-year gross maturation successful the 3rd quarter, a maturation complaint it has maintained for the erstwhile 2 quarters. However, gross maturation has been slowing down implicit the past 3 years. Chewy doesn't look to person galore avenues to turn its apical enactment faster.

Additionally, with nett net margins hovering astir 2%, the institution doesn't lucifer high-growth tech companies that tin scope 10% to 20%. Chewy has held debased margins for respective years. Fiscal 2023 and fiscal 2024 nett net margins were 0.4% and 3.3%, respectively, portion the third-quarter 2025 nett net borderline was 1.9%.

Structurally, Chewy isn't peculiarly profitable, with gross margins beneath 30%, which makes it challenging to execute precocious nett net margins. So an 8% year-over-year gross maturation complaint whitethorn not beryllium capable to prolong meaningful semipermanent gains.

Chewy intends to boost nett margins by focusing connected high-margin opportunities similar wellness and wellness. The institution precocious acquired SmartEquine to pat into the highly profitable equine wellness industry. This acquisition should alteration Chewy to connection subscription-based supplement programs, personalized nutrition plans, and a scope of equine products.

SmartEquine besides aligns with Chewy's absorption connected yearly recurring gross and higher lawsuit beingness values. This ongoing displacement tin marque immoderate of Chewy's gross much predictable.

However, it'd beryllium prudent to debar precocious expectations for Chewy's nett margins. The full favored manufacture is known for debased nett margins. Other favored stocks similar Trupanion (NASDAQ: TRUP), Freshpet (NASDAQ: FRPT), and Petco (NASDAQ: WOOF) person low-single-digit nett net margins.