From Sunday: Taking to the #1 Slot on our Best Idea Long List (which formerly belonged to DUFRY). Massive move for us here with CHWY, but we think that the selloff on Friday sets up a great TREND and TAIL long opportunity. While the quarter was on the weak side relative to expectations – especially on margins due to freight and wage inflation – the company crushed it relative to e-comm peers. CHWY +24%, Etsy +11%, AMZN Online Stores +3%, OSTK -6%, Wayfair US -21%. The top line is incredibly resilient here with new customer additions above pre-pandemic levels. We’re one quarter away from seeing an inflection in growth to the upside -- then over 2-3 quarters likely have the catalyst of Int’l launch. The combination of those factors should have a dramatic change/improvement to the narrative around CHWY. After Friday’s carnage the stock is sitting near-trough at 2x Sales. Note that it has been as high as 5.2x, and as low as 1.6x – neither of which it should have seen. On a sales acceleration in 2022 we’re likely to be looking at 3-4x which gets us to $75-$100 over the course of a year, and a 3-bagger over a TAIL duration.
Call Details
Date/Time: Wednesday, December 22nd at 10am EST Add To Calendar: CLICK HERE
Toll Free:
Toll:
UK: 0
Confirmation Number: 13725494
Live Video Link will be provided prior to the call
*The Auto Retail Black Book previously scheduled for this date will be postponed until January.