Chewy Inc. (NYSE: CHWY) is currently trading at over 80% below its all-time high from early 2021, raising questions about its long-term stock price potential. The company reported fiscal 2022 sales of $10.1 billion, a significant jump from $7.1 billion in 2020, but recent growth has slowed to 8.3%. With management targeting high-single-digit to low-double-digit sales growth, investors are keenly analyzing how these projections will affect future valuations.
Using a price-to-sales (P/S) ratio of 0.7, below its five-year median of 1.3, Chewy could see its shares double to $43.48 if it meets management’s sales goals. However, a lower growth scenario could lead to a modest price of $25.20, emphasizing the risk of potential stagnation.
For long-term investors, Chewy presents a compelling case as a value stock, but careful monitoring of sales growth will be crucial in determining its investment viability.
Source: fool.com