2 weeks $CHWY Earnings key takeaways Reddit        

The biggest category everybody already looks at is Sales. Even coming out of the Pandemic Chewy’s Sales increased 31.7%. Solid for any company. They are forecasting $8.9-9 billion for the year.

On top of the increase in sales, Chewy also, once again, added to their Gross Margin Percentage. Adding to your Gross Margin Percentage is the equivalent of adding sales. Q1 2020 they were at 23.4% and Q1 2021 they are at 27.6% respectively. FY 2020 totaled out to 25.5%. This 2.1% increase over what they did last year will result in an additional $189 million going to their bottom line based on their forecasted $9 billion in 2021 Sales.

Also, one of the most overlooked categories I usually see when people are looking at financials statements are the cash flows from Operations. Chewy’s Net cash provided by operating activities was $98.3 million and their free cash flow was $59.4 million. At the end of the day, cash is always king and Chewy has been rolling it in extremely well.

My takeaways (opinion). Chewy is in a prime position to continue the growth that has propelled them to where they are and should continue to see increased earnings going forward. The current valuation of the company I believe is still too low and the current market cap is less than their annual revenue. If you compare Chewy to someone like Amazon. Amazon has annual revenue of $386 billion (FY’20) and a market cap of $1.7 Trillion. This comes to 4.4X Annual Revenue. Chewy is also commanding a higher profit margin than Amazon who comes in just shy of 25%.

TL/DR: Chewy keeps kicking Ass – is extremely undervalued.

This is not financial advice. I’m just some dumbass.

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