Chewy (CHWY) Stock Forecast: What Could Drive It in 2026
Short answer
What is actually driving Chewy (CHWY) right now is Autoship makes the revenue sticky: Autoship, Chewy's auto-replenishment subscription, drives roughly 83% of net sales, which is rare predictability for a retailer. FY2025 net sales is About $12.60 billion, up 6.2% (roughly 8.3% on a 52-week basis). If that keeps playing out, the setup is favourable; the risk to it is chewy operates in a structurally low-margin retail business, so even with mix improvements its net margins sit in the low single digits and small cost or pricing shifts matter a lot. No one can predict where CHWY trades, and Walnut does not publish targets, so treat this as a scenario, not a price target or prediction.
What could drive Chewy (CHWY) higher?
1. Autoship makes the revenue sticky.
Autoship, Chewy's auto-replenishment subscription, drives roughly 83% of net sales, which is rare predictability for a retailer. Pet food and medications are non-discretionary, repeat purchases, so the base tends to hold up even in weaker consumer environments. With around 21.3 million active customers and net sales per active customer near $600, the model compounds as existing customers buy more categories. The strategic question is less about losing customers and more about how much more Chewy can sell each one.
2. Higher-margin businesses are the profit lever.
Chewy is layering more profitable revenue on top of low-margin product sales. The Chewy Ads retail-media network, launched in 2023, has roughly doubled its advertisers and is the business management credits as a primary driver of gross-margin expansion. Gross margin reached about 29.8% in fiscal 2025 and 30.1% in the first quarter of fiscal 2026. Chewy Pharmacy adds another structurally higher-margin stream, helping adjusted EBITDA margin climb toward the mid-single digits with guidance around 6.6% to 6.8% for fiscal 2026.
3. Vet care extends the ecosystem.
Chewy is building a physical pet-health footprint to capture more of the roughly $40 billion Americans spend on pet healthcare. Its 2026 agreement to acquire Modern Animal lifts Chewy Vet Care from 18 clinics toward 47, with a target of around 60 locations, and is expected to add more than $125 million of annualized run-rate revenue. Management expects clinic customers to spend meaningfully more across Chewy overall. The clinics are an investment that is expected to break even around 2026 and contribute to profit later, so the payoff is multi-year.
4. Cash generation and buybacks.
Chewy is now firmly cash-generative, posting record free cash flow of about $562 million in fiscal 2025. It returns capital through share repurchases rather than a dividend, deploying roughly $200 million on buybacks in the first quarter of fiscal 2026 alone, often alongside secondary offerings as BC Partners sells down its stake. Net income of about $222.8 million in fiscal 2025 and $94.8 million in the latest quarter show the business is profitable on a GAAP basis. The buyback program also helps offset dilution from share-based compensation, which remains a meaningful expense.
What could weigh on CHWY?
Chewy operates in a structurally low-margin retail business, so even with mix improvements its net margins sit in the low single digits and small cost or pricing shifts matter a lot. Growth has slowed as the US pet market matures, with net sales up only about 6% in fiscal 2025 and active-customer growth modest after a long stretch of flat-to-declining counts following the pandemic pet boom. Competition is intense and well-capitalized: Amazon, Walmart, big-box pet chains like PetSmart and Petco, and local veterinarians all compete for the same wallet. The vet-clinic expansion carries execution and integration risk and weighs on near-term profit, while share-based compensation and ongoing BC Partners stock sales create dilution and overhang. Finally, the stock often trades at a premium that already bakes in continued margin gains, so disappointing customer growth or margin progress can pressure the shares.
How to think about a CHWY forecast
Rather than chasing a price target, it tends to help to weigh the drivers above against the risks, decide how long you are willing to hold, and size the position so a wrong call is survivable. A “forecast” is really a probability-weighted view of those drivers playing out, not a number.
For the full picture, see the CHWY guide and whether CHWY is a buy. In Walnut you can pressure-test the thesis against your real portfolio.
The bottom line on the CHWY outlook
The bottom line: what is driving Chewy (CHWY) is Autoship makes the revenue sticky, with fy2025 net sales at About $12.60 billion, up 6.2% (roughly 8.3% on a 52-week basis). If that keeps playing out the setup is favourable; the risk is chewy operates in a structurally low-margin retail business, so even with mix improvements its net margins sit in the low single digits and small cost or pricing shifts matter a lot. No one can predict the price, so treat any CHWY forecast as a scenario, not a target or prediction, and decide from your own thesis and time horizon. Walnut is not an investment adviser.
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FAQ
What is the forecast for Chewy (CHWY)?
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No one can reliably predict where CHWY will trade, and Walnut does not publish price targets. What is more useful is the setup: the drivers that could push Chewy higher and the risks that could weigh on it. This page lays out both so you can form your own view. Not a recommendation.
What could drive CHWY higher?
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The main growth drivers are Autoship makes the revenue sticky; Higher-margin businesses are the profit lever; Vet care extends the ecosystem. Whether they play out is the real question, not a guaranteed path.
What are the risks to CHWY?
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Chewy operates in a structurally low-margin retail business, so even with mix improvements its net margins sit in the low single digits and small cost or pricing shifts matter a lot. Growth has slowed as the US pet market matures, with net sales up only about 6% in fiscal 2025 and active-customer growth modest after a long stretch of flat-to-declining counts following the pandemic pet boom. Competition is intense and well-capitalized: Amazon, Walmart, big-box pet chains like PetSmart and Petco, and local veterinarians all compete for the same wallet. The vet-clinic expansion carries execution and integration risk and weighs on near-term profit, while share-based compensation and ongoing BC Partners stock sales create dilution and overhang. Finally, the stock often trades at a premium that already bakes in continued margin gains, so disappointing customer growth or margin progress can pressure the shares.
Will CHWY stock go up in 2026?
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Nobody knows, and anyone who says they do is guessing. Chewy's direction depends on whether the drivers above outweigh the risks, plus the broader market. Focus on the thesis and your time horizon rather than a single-year call.
Is CHWY a buy?
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That depends on your thesis, time horizon, and what you already own, not on a forecast. See the CHWY "is it a buy?" page for a framework. Walnut is not an investment adviser.
How is Chewy growing beyond selling pet food?
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Chewy is layering higher-margin businesses onto product sales. Chewy Ads, its retail-media network, has roughly doubled its advertisers since launch and is a main driver of gross-margin gains, while Chewy Pharmacy and an expanding vet-clinic network (lifted toward 47 sites by the 2026 Modern Animal acquisition, targeting around 60) aim to capture more of the large pet-healthcare market.
Walnut is informational, not investment advice. This page describes drivers and risks; it is not a price forecast, target, or recommendation. Markets are uncertain and past performance does not predict future results.