Chewy Faces Critical Test as Stock Plunges Below All Moving Averages Ahead of Earnings

Chewy Inc reports fourth-quarter fiscal 2025 earnings before the market opens on March 25, with analysts expecting $0.09 per share—more than double the year-ago result. The report comes at a pivotal moment as the stock has fallen 30% year-to-date and trades below every major moving average, while the options market is pricing in a nearly 10% post-earnings move.

Part 1: Earnings Preview

Chewy Inc (CHWY) is the leading online retailer of pet food, treats, and supplies in the United States, serving millions of pet parents through its e-commerce platform and expanding healthcare services. The company has built a loyal customer base through its Autoship subscription program and personalized customer service.

Chewy is scheduled to report fourth-quarter fiscal 2025 results before the market opens on March 25. Analysts expect earnings of $0.09 per share, based on a consensus of 9 estimates ranging from $0.06 to $0.12. The company most recently reported $0.14 per share for the third quarter. Compared to the same quarter last year when Chewy earned $0.04 per share, the consensus represents +125% year-over-year growth—a dramatic acceleration that reflects improving profitability.

Three key themes define this earnings story:

Profitability Inflection: Analysts have significantly raised their estimates for this quarter from $0.04 previously to $0.09 currently, signaling growing confidence in Chewy's ability to expand margins. The company's path to sustainable profitability remains the central question for investors, particularly as it balances growth investments in healthcare services with bottom-line improvement.

Pet Category Stability: Recent commentary around stable pet category trends has drawn heightened attention, as investors assess whether consumer spending on pets remains resilient amid broader economic uncertainty. Any guidance on category growth and market share gains will be critical.

Valuation Compression: With the stock down 30% in 2026, Chewy's valuation has dropped significantly. Analysts are debating whether this represents a buying opportunity or reflects fundamental concerns about growth deceleration. The company's ability to articulate a compelling growth narrative will be essential to restoring investor confidence.

Ahead of the release, analysts remain constructive on the long-term opportunity. Recent previews emphasize that investors will focus intensely on management's commentary around sales outlook and operational efficiency, particularly given the stock's recent underperformance and questions about whether the bull case remains intact.

Part 2: Historical Earnings Performance

Chewy has demonstrated consistent execution over the past four quarters, beating or meeting analyst estimates in every report. The company delivered a +33.33% surprise in Q4 2024 (January 2025), reporting $0.04 versus $0.03 expected. This was followed by a +6.25% beat in Q1 2025 (April), an in-line result in Q2 2025 (July), and a +16.67% beat in Q3 2025 (October) with $0.14 versus $0.12 expected.

The pattern reveals improving earnings power and management's ability to guide conservatively and deliver upside. The magnitude of beats has been modest but consistent, with the most recent quarter showing the strongest outperformance. This track record suggests Chewy has developed better visibility into its business and is effectively managing expectations, which bodes well for the upcoming report given the substantial year-over-year growth embedded in the $0.09 consensus.

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

Chewy typically reports before the market opens, meaning Day 0 represents the first trading session where investors react to results, while Day +1 captures follow-through momentum.

Historical price action shows significant volatility around Chewy's earnings releases. Over the past eight quarters, the stock has averaged an absolute move of 9.40% on Day 0 with an intraday range of 10.14%. Day +1 follow-through has averaged 3.31% with a 5.81% range.

The direction has been mixed, with several quarters showing dramatic moves in both directions—including a -16.60% decline in September 2025 and a +27.14% surge in May 2024. The most recent report in December 2025 saw a modest +1.52% Day 0 move followed by a -3.39% Day +1 decline, suggesting initial optimism gave way to profit-taking. Investors should prepare for substantial volatility, as the stock has demonstrated a tendency for double-digit percentage swings when results or guidance deviate from expectations.

Part 2.2: Options Market Expected Move

The options market is pricing in an expected move of 9.94% through the March 27 weekly expiration, which aligns closely with the 9.40% average absolute Day 0 move observed historically. This suggests options traders are anticipating typical earnings volatility rather than an outsized reaction, though the wide historical range indicates potential for moves well beyond this baseline.

Part 3: What Analysts Are Saying

Analyst sentiment on Chewy remains strongly bullish despite the recent stock decline. The consensus includes 20 Strong Buy ratings, 2 Moderate Buys, and 6 Holds, with no Sell ratings among the 28 analysts covering the stock. The average recommendation of 4.50 reflects conviction in the long-term opportunity.

The mean price target of $44.58 implies 90% upside from the current price of $23.45, with estimates ranging from a low of $28.00 to a high of $54.00. This wide range reflects differing views on the pace of profitability improvement and multiple expansion potential. Notably, analyst ratings have remained unchanged over the past month, suggesting the recent selloff has not prompted downgrades—instead, the lower stock price has made the risk/reward more attractive at current levels.

The stability of ratings despite the 30% year-to-date decline indicates analysts view the weakness as a buying opportunity rather than a reflection of deteriorating fundamentals. The substantial upside to the average target suggests the Street believes current valuation does not reflect Chewy's improving profitability trajectory and market position.

Part 4: Technical Picture

Chewy's technical setup heading into earnings is decidedly bearish. The Barchart Technical Opinion shows a 100% Sell signal currently, unchanged from last week and last month, indicating sustained selling pressure.

Timeframe Analysis:

• Short-term (100% Sell): Maximum bearish signal indicates intense near-term downward momentum
• Medium-term (100% Sell): Continued weakness across the intermediate timeframe confirms the downtrend is not just a short-term phenomenon
• Long-term (100% Sell): Bearish signal across the longer-term trend reflects a complete breakdown in technical structure

Trend Characteristics: The signal strength is at Maximum and the direction is Strengthening, indicating the bearish trend is intensifying rather than stabilizing—a particularly challenging technical environment heading into a high-stakes earnings report.

The stock is trading at $23.45, below every major moving average: the 5-day ($23.80), 10-day ($24.51), 20-day ($25.43), 50-day ($27.49), 100-day ($30.41), and 200-day ($34.73).

This complete breakdown below all moving averages represents a technical capitulation that often precedes either a washout bottom or further deterioration. The 200-day moving average at $34.73 is now nearly 50% above the current price, illustrating the severity of the decline. From a technical perspective, the setup is highly unfavorable—any disappointment in earnings or guidance could trigger another leg down, while a strong beat would need to be substantial to reverse the entrenched bearish momentum. The stock will likely need to reclaim at least the 20-day moving average at $25.43 to signal the beginning of technical stabilization.