Chewy, Inc. (NYSE: CHWY)

Sector: Consumer Cyclical Industry: Internet Retail CIK: 0001766502
Market Cap 11.57 Bn
P/B 24.64
P/E 56.04
P/S 0.92
ROIC (Qtr) 18.40
Div Yield % 0.00
Rev 1y % (Qtr) 8.31
Total Debt (Qtr) 523.00 Mn
Debt/Equity (Qtr) 1.11

About

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 635.72M provides robust 1.22x coverage of total debt 523M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 3.26B provides 6.22x coverage of total debt 523M, indicating robust asset backing and low credit risk.
  • Robust free cash flow of 487M exceeds capital expenditure of 148.71M by 3.27x, indicating strong organic growth funding capability.
  • Operating cash flow of 635.72M fully covers other non-current liabilities 42.30M by 15.03x, showing strong long-term stability.
  • Cash reserves of 675.40M provide solid 15.97x coverage of other non-current liabilities 42.30M, indicating strong liquidity.

Bear case

  • Operating cash flow of 635.72M barely covers its investment activities of (178.81M), with a coverage ratio of -3.56, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • The company's operating cash flow of 635.72M shows concerning coverage of stock compensation expenses of 307.62M, with a 2.07 ratio indicating potential earnings quality issues.
  • Operating earnings of 214.78M show weak coverage of depreciation charges of 159.94M, with a 1.34 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 487M represents just -1449.42x of debt issuance (336000), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High financing cash flow of (288M) relative to working capital of (331.70M), which is 0.87x suggests concerning dependence on external funding for operational needs.

Peer comparison

Companies in the Internet Retail
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AMZN Amazon Com Inc 2,240.82 Bn 28.85 3.13 152.99 Bn
2 BABA Alibaba Group Holding Ltd 376.37 Bn 21.36 2.65 39.55 Bn
3 PDD PDD Holdings Inc. 146.78 Bn 10.22 2.50 1.50 Bn
4 MELI Mercadolibre Inc 99.88 Bn 48.09 3.81 9.88 Bn
5 DASH DoorDash, Inc. 77.19 Bn 89.45 6.11 3.26 Bn
6 SE Sea Ltd 64.15 Bn 45.22 3.05 4.24 Bn
7 JD JD.com, Inc. 40.42 Bn 8.94 0.22 15.74 Bn
8 EBAY Ebay Inc 40.35 Bn 18.49 3.77 7.02 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.48 1.44
EV to Cash from Ops. EV/CFO 18.04 10.32
EV to Debt EV to Debt 21.93 11.03
EV to EBIT EV/EBIT 53.40 18.24
EV to EBITDA EV/EBITDA 31.68 16.97
EV to Free Cash Flow [EV/FCF] EV/FCF 23.55 15.91
EV to Market Cap EV to Market Cap 0.99 -40.94
EV to Revenue EV/Rev 0.91 -2.40
Price to Book Value [P/B] P/B 24.64 5.28
Price to Earnings [P/E] P/E 56.04 32.69
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -93.84
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -203.90
Dividend per Basic Share Div per Share (Qtr) 0.00 0.08
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -3.46
Interest Coverage Int. cover (Qtr) -57.69 37.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -18.70 -39.22
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 33.31 58.76
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -39.57 -370.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 47.12 -113.32
EBIT Growth (1y) % EBIT 1y % (Qtr) 34.62 -1,110.85
EBT Growth (1y) % EBT 1y % (Qtr) 14.44 -130.57
EPS Growth (1y) % EPS 1y % (Qtr) -46.24 2.19
FCF Growth (1y) % FCF 1y % (Qtr) 34.14 -50.73
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.39 0.67
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 3.82 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 -0.04
Cash Ratio Cash Ratio (Qtr) 0.30 2.15
Current Ratio Curr Ratio (Qtr) 0.85 3.66
Debt to Equity Ratio Debt/Equity (Qtr) 1.11 0.49
Interest Cover Ratio Int Coverage (Qtr) -57.69 37.32
Times Interest Earned Times Interest Earned (Qtr) -57.69 37.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 3.00 3.67
EBIT Margin % EBIT Margin % (Qtr) 1.71 -28.93
EBT Margin % EBT Margin % (Qtr) 1.74 -42.42
Gross Margin % Gross Margin % (Qtr) 29.60 44.90
Net Profit Margin % Net Margin % (Qtr) 1.60 -42.23