CHWY - Embedded Expectations Analysis - 2021 05 25
Chewy, Inc. (CHWY:USA) currently trades at a significant premium relative to UAFRS-based (Uniform) assets, with a 56.0x Uniform P/B. At these levels, the market has bullish expectations for the firm, but management may be concerned about cost, new customers, and technology and automation investmentsSpecifically, management may lack confidence in their ability to maintain net sales per active customer (NSPAC), adjusted EBITDA margin, and e-commerce growth. Moreover, they may be concerned about the potential of health care as a higher-margin vertical, as well as their long-term technology and automation investments. Furthermore, management may lack confidence in their ability to efficiently add new customers to their platform, sustain customer lifetime value (LTV) improvements, and control their overall expenses. They may also have concerns about labor market pressures
Chewy is a pure play e-commerce business geared toward pet products for dogs, cats, fish, birds, small pets, horses, and reptiles. The company serves its customers through its retail website, www.chewy.com, and its mobile applications and focuses on delivering exceptional customer service, a large selection of high-quality pet food, treats and supplies, price, convenience (including Chewy's Autoship subscription program), fast shipping, and hassle-free returns.
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