On October 18, 2023, Stacy Bowman, the Interim Chief Financial Officer and Chief Accounting Officer of Chewy Inc (CHWY, Financial), sold 11,423 shares of the company. This move is part of a series of transactions made by the insider over the past year, which have seen a total of 115,096 shares sold and no shares purchased.
Chewy Inc is an American online retailer of pet food and other pet-related products. The company is based in Dania Beach, Florida and was founded by Ryan Cohen and Michael Day in 2011. Chewy offers a broad selection of products for pets including dogs, cats, fish, birds, small pets, reptiles, and horses. The company's business model is built on customer service and convenience, offering 24/7 assistance, advice, and an easy-to-use mobile application for shopping and managing orders.
The insider's recent sell-off has raised eyebrows among investors and analysts, prompting a closer look at the company's stock performance and insider trading trends.
The insider transaction history for Chewy Inc shows a clear trend of insider selling over the past year, with 27 insider sells and no insider buys. This could be a potential red flag for investors, as it may indicate that insiders believe the company's stock is overvalued or that they expect its price to decrease in the future.
On the day of the insider's recent sell, shares of Chewy Inc were trading at $18.24, giving the company a market cap of $7.26 billion. This price represents a price-earnings ratio of 143.33, which is significantly higher than the industry median of 16.59. However, it is lower than the company's historical median price-earnings ratio, suggesting that the stock may be undervalued compared to its past performance.
According to the GuruFocus Value, which is an intrinsic value estimate based on historical multiples, a GuruFocus adjustment factor, and future business performance estimates, Chewy Inc's stock is significantly undervalued. With a price of $18.24 and a GuruFocus Value of $53.72, the stock has a price-to-GF-Value ratio of 0.34.
Despite the insider's recent sell-off, the undervaluation of Chewy Inc's stock according to the GuruFocus Value suggests that there may still be potential for growth. However, the trend of insider selling should be taken into account when making investment decisions. As always, investors are advised to conduct their own research and consider multiple factors before buying or selling any stock.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
