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Sunday's Featured News Chewy Gobbles up Market Share in 2026: Poised to Advance in Q2Author: Thomas Hughes. Published: 3/27/2026. 
Key Points - Chewy is on track to rebound in 2026 as its growth, margin, and cash flow invigorate buyers to action.
- Industry-leading growth and market share gains underpin the outlook.
- Optimistic earnings outlook triggered a buying event, confirming support at a critical level.
- Special Report: Elon's "Hidden" Company
Chewy (NYSE: CHWY) stock faces headwinds in 2026, like many retailers. But its digital-first, asset-light model is working and gaining share, as shown by an industry-leading growth pace. Chewy continues to outgrow peers and the broader pet-care industry, helped by rising digital penetration globally and a greater focus on nutrition and pet healthcare. The takeaway for investors: the stock surged by double digits after an otherwise tepid release, indicating market support and potential for further gains this year. Market action suggests upside may still be possible. Chewy Leads Market in Q4: Guides for Strength in 2026 Chewy delivered a solid quarter despite a tough year-ago comparison and analysts' expectations. The company reported $3.26 billion in net revenue, a 0.5% gain on an as-reported basis and an 8.1% increase on an adjusted basis (the adjustment reflects an extra week). Strength was driven by a 4% increase in active customers, a 2.2% rise in sales per active user, and a 4.8% increase in autoship sales. Amazon, Google, Meta, and Microsoft have collectively committed nearly 700 billion dollars to technology infrastructure this year alone. Bloomberg called it 'a boom without a parallel this century.' That capital doesn't stay with the giants - it flows through hundreds of smaller companies supplying chips, software, data, and infrastructure. Chris Rowe has identified the small-cap stocks he believes are positioned directly in its path. Watch the free presentation and see the specific stocks Chris identified Autoship sales are critical because they represent sticky, recurring revenue tied to food, medicine and healthcare products. At 84% of net sales, autoship gives Chewy a stable foundation to accelerate growth in 2026 and provides clear revenue visibility for investors. Margin news was mixed. The company widened margins across the board, producing a 30.4% increase in adjusted EBITDA, a 72% increase in net income and a 47% rise in free cash flow (FCF), though results slightly missed some expectations. Adjusted earnings per share (EPS) fell by $0.01 year over year and missed consensus, but Chewy still built cash on the balance sheet, kept debt low and continued share repurchases. Chewy's buybacks weren't robust, failing to reduce the share count significantly in fiscal 2026, but they offset share-based compensation and are likely to increase over time. Management expects margin improvement and an accelerated pace of earnings growth. The long-term outlook calls for high-teens to low-20s percent compound annual EPS growth, which implies the stock is trading at roughly 9x its 2031 EPS forecast. While valuation concerns exist today, that metric suggests meaningful upside over the next few years. Guidance drove CHWY's post-release price action. The revenue outlook was in line with expectations and the earnings outlook was optimistic. Management forecasts FY2027 adjusted EPS of $13.68 — nearly a dime above MarketBeat's reported consensus. 
Analysts Put Bottom in Chewy Stock: Institutions Pose Risk Analyst reaction to the release was mixed. Early notes praised earnings strength and the 2026 guidance but also trimmed price targets. The net result: Chewy's Moderate Buy rating and an 80% buy-side bias remain intact, though the consensus price target was moderated and now implies roughly 60% upside for the year. Investors should note that many of the post-release price target revisions landed at the low end of their prior ranges. Still, the new targets suggest some upside is possible, with most implying gains in the 20%–50% range. Those projections support the view that Chewy could rebound, setting the stage for positive revisions later in the year if momentum continues. Institutional ownership is a key risk: institutions own more than 90% of Chewy's stock and were net sellers in early Q1. If that selling continues into Q2 2026, CHWY may struggle to clear near-term resistance around $20.75, a level likely to be tested before quarter-end. Conversely, if institutions return to accumulation, they could shore up the market bottom and enable a stronger rebound. Chewy's catalysts include execution of several high-margin initiatives: Chewy Vet Care, private-label expansion, AI-driven efficiencies and a growing advertising business. The advertising platform allows manufacturers to reach consumers on a pay-per-click basis, while AI improves efficiency across Chewy's digital ecosystem. Private labels are a growing margin driver and help the company gain share versus premium brands. | 
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