This Petcare Stock is Cheaper Than You Think

[View in browser]( [The Spill Logo] BROUGHT TO YOU BY: [Logo]( Proprietary Data Insights Financial Pros’ Top IT Services Stock Searches in the Last Month Rank Ticker Name Searches #1 [CHWY]( Chewy 31 #2 [IDXX]( Idexx Laboratories 26 #3 [ZTS]( Zoetis Inc. 9 #4 [WOOF]( Petco Health and Wellness Co. 8 #5 [FRPT]( Freshpet 4 #ad [It's time you learn about Alternative Investments!]( Brought to you by [Stansberry Research]( [Massive “Lightning Line” Rollout Underway Across America…]( [Stansberry Research - Massive “Lightning Line” Rollout Underway Across America…]( Over the 200 years, there have been three major shifts to the way money works in America. First, when money "went electric", with Western Union's first ever wire transfers. Suddenly, money could move at incredible speeds... and Western Union became one of the first major American corporations. Next, Frank McNamara's Diners Club card put "plastic money" in every American's pocket. Almost overnight, how we spend money changed... and the companies driving the shift soared as much as 45,000%. Then came "chip and pin" money, which saw millions of new encrypted bank cards mailed out across America... and drove the companies building out the tech as much as 8,000% higher. I'm writing to you today because the fourth great shift in how money in America works just started. It's backed by the White House, Federal Reserve, US Treasury and at least 41 major banks. And it involves a powerful new technology that's being rolled out across America as you read these words. Just how much will investors make this time around? And what can you do to take advantage? [Everything you need to know is here.]( Why Financial Pros Are Growing Bullish on Chewy When Chewy (CHWY) went public in 2019, shares traded at $36. Today, they’re down at $22. In between, the stock rode the meme craze as high as $120. But like most bubbles, investors realized the company wasn’t profitable…yet. However, Chewy finally turned a profit in the last 12 months and is pumping out close to $500 million in operating cash and $250 million in free cash. With double-digit revenue growth and a rabidly loyal customer base, financial pros are finally taking a REAL look at Chewy for long-term holds, according to our Trackstar data. Here’s why… Chewy’s Business Revolutionizing pet care with a click, Chewy has emerged as a dominant force in the online pet industry. This innovative company offers a comprehensive range of products and services, creating a one-stop-shop for all things pet. Chewy has earned acclaim for exceptional customer service and an in-depth understanding of what pets and their parents need. The company segments its business into the following areas: Consumables (69% of total revenues) - The backbone of Chewy's revenue, this segment encompasses a variety of pet food, medicines, and consumables. Popular brands like American Journey and Tylee's contribute to this segment's profitability. Hard Goods (15% of total revenues) - Comprising durable pet products such as toys, supplies, and health items, this segment is anchored by the Frisco brand. Others (16% of total revenues) - This diverse segment includes Chewy's extended services, such as healthcare, insurance, and veterinary solutions, illustrating the company's broad market appeal. Chewy's recent quarterly earnings revealed a substantial revenue increase, reflecting their successful expansion into new product categories like customized pet diets and eco-friendly supplies. It doesn’t hurt that more pet retail sales keep moving online. [Pet market] [Source: Chewy Investor Day Presenation]( Strategically, they are intensifying efforts in AI-driven recommendations and customer engagement tools, aiming to personalize the shopping experience and foster long-term loyalty among pet owners. Financials [Financials] Source: Stock Analysis Chewy’s revenues just before and after they went public. However, it wasn’t until the last 12 months that the company turned a P&L profit and had decent free cash flow. With very little debt, management can spend and invest in their business, expanding margins and enhancing growth, which is forecast at 15% average annual adjusted EBITDA (essentially cash flow). Valuation [Valuation] Source: Seeking Alpha On paper, Chewy doesn’t appear cheap. It trades at 885x earnings. However, if you exclude stock-based compensation, it trades at 55x. But price-to-cash flow is a better measure to watch. At 21x operating cash, Chewy does better than all its peers save Petco Health and Wellness Co. (WOOF). With margins improving and decent revenue growth, price-to-cash flow will only get better. Growth [Growth] Source: Seeking Alpha After multiple tears of double-digit revenue growth, Chewy forecasts sub-10 % growth for the first time since its IPO. We feel this is conservative. The company has multiple avenues to increase sales, from international expansion to pet insurance and organic pet care products. What we don’t know is how long it will take them to get there. Profitability [Profit] Source: Seeking Alpha Chewy’s profitability falls short of its peers. Ideally, its margins would resemble Petco Health and Wellness Co. or better since Chewy doesn’t have a physical footprint to manage. However, Chewy’s free-cash-flow margin is better, implying its overall business is healthier than its peers. [Tickers Trending Among FinPros & Retail Investors]( Once every quarter, we compile millions of Financial Professional and Retail Investor's stock searches across our 100+ financial sites. We reserve this exclusive report for our newsletter subscribers so you can learn about the stocks and industries that you should keep an eye on. This info can help you decide what to do in your portfolio – so you can protect the money you have and generate bigger gains. [Click here now to download the FREE Trackstar Q3 2023 Report.]( Our Opinion 8/10 Chewy drives brand loyalty better than 99% of companies out there, not just in pet care. The key to its future lies in exploiting additional channels and driving down costs. We believe Chewy has an excellent management team capable of achieving these goals. While this won’t be a high-growth stock, it’s one that you can make money on and feel good about owning. [-facebook-share]( [-twitter-share]( [-linkedin-share]( [-email-share](mailto:?body= https%3A%2F%2Finvestingchannel.com%2F%3Fp%3D601967?utm_medium=ic-nl&utm_source=115071 ) [We want to hear from you. Let us know your thoughts by clicking here]( [Ads] [InvestingChannel Logo](#) Follow us on: [Facebook Logo]( [LinkedIn Logo]( [Twitter Logo]( [Instagram Logo]( To ensure delivery of all emails, [allow us on your list](. Manage your subscriptions with our [preference center](. [Unsubscribe here.]( View our privacy policy [here](. Copyright ©2024 InvestingChannel. All rights reserved. 1325 Avenue of the Americas, Floor 27 & 28 New York, New York 10019 Disclaimer: This is not investment advice. This InvestingChannel, Inc., newsletter is for information purposes only and is based on opinion. Futures, forex, stock, and options trading are not appropriate for all investors. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can ensure returns or eliminate losses. InvestingChannel, Inc., makes no representation or implication that using any of the methodologies or systems in this newsletter will generate returns or insure against losses. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions. [Link](