As of June 24, 2025, Chewy Inc's estimated intrinsic value ranges from $2.20 to $72.74 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $72.74 | +67.8% |
| Discounted Cash Flow (5Y) | $53.27 | +22.9% |
| Dividend Discount Model (Multi-Stage) | $25.32 | -41.6% |
| Dividend Discount Model (Stable) | $14.90 | -65.6% |
| Earnings Power Value | $2.20 | -94.9% |
Is Chewy Inc (CHWY) undervalued or overvalued?
With the current market price at $43.36, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Chewy Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.92 | 1.39 |
| Cost of equity | 8.1% | 12.7% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 3.5% | 10.6% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 6.5% | 8.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $53 | $21,491M | 86.0% |
| 10-Year Growth | $73 | $29,569M | 73.6% |
| 5-Year EBITDA | $45 | $18,259M | 83.5% |
| 10-Year EBITDA | $62 | $24,996M | 68.8% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $22M |
| Discount Rate (WACC) | 8.6% - 6.5% |
| Enterprise Value | $254M - $337M |
| Net Debt | $(616)M |
| Equity Value | $870M - $953M |
| Outstanding Shares | 415M |
| Fair Value | $2 - $2 |
| Selected Fair Value | $2.20 |
| Metric | Value |
|---|---|
| Market Capitalization | $17994M |
| Enterprise Value | $17377M |
| Trailing P/E | 46.35 |
| Forward P/E | 55.18 |
| Trailing EV/EBITDA | 15.70 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 1.19 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $21.82 |
| Discounted Cash Flow (5Y) | 25% | $13.32 |
| Dividend Discount Model (Multi-Stage) | 20% | $5.06 |
| Dividend Discount Model (Stable) | 15% | $2.23 |
| Earnings Power Value | 10% | $0.22 |
| Weighted Average | 100% | $42.66 |
Based on our comprehensive valuation analysis, Chewy Inc's weighted average intrinsic value is $42.66, which is approximately 1.6% below the current market price of $43.36.
Key investment considerations:
Given these factors, we believe Chewy Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.