Is it too risky to buy Chewy stock after missing FQ3 earnings expectations?

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On Thursday, Chewy Inc. (NYSE:CHWY) shares declined by more than 8% during the extended trading session. The pet food retailer announced its most recent quarterly results after the markets closed, missing the consensus for analyst expectations on earnings. On the other hand, the company’s FQ3 revenue was in line with Street estimates.

Chewy posted FQ3 GAAP earnings per share of -$0.08, missing the consensus for analyst expectations of -$0.04. On the other hand, revenue for the quarter increased by 24.2% from the same quarter in 2020 to $2.21 billion, in line with analyst expectations.

Chewy also issued its FQ4 and full-year 2021 revenue below the consensus Street forecasts.

Chewy looks substantially overvalued

From an investment perspective, Chewy shares trade at a steep P/E ratio of 2680.95 and a forward P/E ratio of 173.77. Therefore, the stock seems too expensive for bargain hunters to consider.

On the other hand, analysts expect its earnings per share to skyrocket by more than 64% this year before rising further by a whopping 414% next year. 

Therefore, growth investors may find it an attractive option for their portfolios.

Source – TradingView

Technically, Chewy shares seem to be trading within a descending channel formation in the intraday chart. As a result, the stock has plummeted closer to the oversold conditions of the 14-day RSI.

Therefore, investors could target potential technical rebounds at about $62.33, or higher at $68.72. However, due to the current bearish pressure, the decline could continue towards $50.02 and $43.38.

The post Is it too risky to buy Chewy stock after missing FQ3 earnings expectations? appeared first on Invezz.

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