On Thursday, Evercore ISI adjusted its price target for Chewy Inc . (NYSE:CHWY), raising it to $22.00 from the previous $19.00 while keeping an In Line rating on the stock. The adjustment follows Chewy's first-quarter results, which included revenue that slightly exceeded both Evercore ISI and Wall Street projections by approximately 1%. Additionally, the company reported Gross Margin and EBITDA that were significantly above expectations.
Despite the positive financial outcomes, the number of active customers for Chewy showed a slight decline compared to the previous quarter, continuing a downward trend. For the second quarter, Chewy's revenue is expected to match Wall Street forecasts, and the company has reiterated its revenue guidance for the full fiscal year 2024. Moreover, Chewy has improved its FY24 EBITDA margin guidance, raising the midpoint from 3.8% to 4.2%.
Chewy's first-quarter performance showcased several strong points, including a record-high Gross Margin—even when excluding one-time items—and a record-high EBITDA Margin. The company also saw robust Autoship sales, which accounted for a significant portion of the revenue, and maintained consistently positive free cash flow.
InvestingPro Insights
Chewy Inc. (NYSE:CHWY) has been a topic of interest following its recent first-quarter results, and the insights from InvestingPro provide a deeper dive into the company's financial health and stock performance. With a market capitalization of $9.39 billion, Chewy's valuation metrics are noteworthy. The company's P/E ratio stands at 113.45, reflecting a premium valuation in the market, which aligns with Evercore ISI's cautious stance on the stock. Additionally, the company has witnessed a strong price total return over the last week and month, at 32.23% and 43.43% respectively, signaling a significant uptick in investor confidence following the earnings report.
InvestingPro Tips highlight that Chewy holds more cash than debt on its balance sheet, which could provide a buffer against economic headwinds. Moreover, the company is expected to see net income growth this year. However, it's also important to consider that two analysts have revised their earnings downwards for the upcoming period, which may warrant attention from investors looking for sustainable growth. For those interested in exploring further, InvestingPro offers additional insights, with a total of 15 InvestingPro Tips available for Chewy Inc., which can be accessed through the InvestingPro platform. To deepen your analysis, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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