Chewy: This Is What A Mispriced Growth Stock Looks Like (Upgrade)

IWA Research2.57K FollowersFollow5ShareSavePlay(9min)CommentsSummaryI am upgrading Chewy (CHWY) to Buy, as the stock now trades at a significant discount, with improving fundamentals and strong growth potential. CHWY guided for 2026 net sales of $13.60–$13.75B and Adjusted EBITDA margin of 6.6%–6.8%, supporting robust free cash flow growth. The company maintains a nearly spotless balance sheet, over $860M in cash, and ongoing buybacks, enhancing financial flexibility. Risks remain from macro pressures and competition, but the risk-reward profile is now compelling with intrinsic value estimated well above current levels. Sally Anscombe/DigitalVision via Getty Images Introduction Back when I last covered Chewy (CHWY), I reiterated their Hold rating, as the valuation still didn’t seem to offer a good enough margin of safety despite improving fundamentals and potential toThis article was written byIWA Research2.57K FollowersFollowI've been researching companies in-depth for over a decade, from commodities like oil, natural gas, gold and copper to tech like Google or Nokia and many emerging market stocks, which I believe could help me provide useful content for readers. After writing my own blog for about 3 years, I decided to switch to a value investing-focused YouTube channel, where I researched hundreds of different companies so far. I would say my favorite type of company to cover are metals and mining stocks, but I am comfortable with several other industries, such as consumer discretionary/staples, REITs and utilities.Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in CHWY over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.