When Will Chewy, Inc. (NYSE:CHWY) Breakeven?

When Will Chewy, Inc. (NYSE:CHWY) Breakeven?

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="We feel now is a pretty good time to analyse Chewy, Inc.’s (NYSE:CHWY) business as it appears the company may be on the cusp of a considerable accomplishment. Chewy, Inc., together with its subsidiaries, engages in the pure-play e-commerce business in the United States. The company’s loss has recently broadened since it announced a US$252.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$270.7m, moving it further away from breakeven. Many investors are wondering about the rate at which Chewy will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.” data-reactid=”28″>We feel now is a pretty good time to analyse Chewy, Inc.’s (NYSE:CHWY) business as it appears the company may be on the cusp of a considerable accomplishment. Chewy, Inc., together with its subsidiaries, engages in the pure-play e-commerce business in the United States. The company’s loss has recently broadened since it announced a US$252.4m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$270.7m, moving it further away from breakeven. Many investors are wondering about the rate at which Chewy will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content=" View our latest analysis for Chewy ” data-reactid=”29″> View our latest analysis for Chewy

Consensus from 13 of the American Online Retail analysts is that Chewy is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$57m in 2023. Therefore, the company is expected to breakeven roughly 3 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2023? Working backwards from analyst estimates, it turns out that they expect the company to grow 80% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

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We’re not going to go through company-specific developments for Chewy given that this is a high-level summary, however, keep in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

One thing we would like to bring into light with Chewy is it currently has negative equity on its balance sheet. This can sometimes arise from accounting methods used to deal with accumulated losses from prior years, which are viewed as liabilities carried forward until it cancels out in the future. These losses tend to occur only on paper, however, in other cases it can be forewarning.

Next Steps:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="There are too many aspects of Chewy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Chewy’s company page on Simply Wall St. We’ve also compiled a list of key factors you should further research:” data-reactid=”50″>There are too many aspects of Chewy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Chewy’s company page on Simply Wall St. We’ve also compiled a list of key factors you should further research:

  1. Valuation: What is Chewy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Chewy is currently mispriced by the market.
  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Chewy’s board and the CEO’s background.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.” data-reactid=”55″>This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

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