Critical Review: Chewy (NYSE:CHWY) & PetMed Express (NASDAQ:PETS)

PetMed Express (NASDAQ:PETS) and Chewy (NYSE:CHWY) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, profitability and earnings.

Valuation and Earnings

This table compares PetMed Express and Chewy”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PetMed Express	$168.86 million	0.24	-$57.29 million	($1.38)	-1.34
Chewy	$12.60 billion	0.78	$222.80 million	$0.60	39.78

Chewy has higher revenue and earnings than PetMed Express. PetMed Express is trading at a lower price-to-earnings ratio than Chewy, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

PetMed Express has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500. Comparatively, Chewy has a beta of 1.42, indicating that its share price is 42% more volatile than the S&P 500.

Profitability

This table compares PetMed Express and Chewy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PetMed Express	-17.34%	-91.69%	-35.15%
Chewy	1.99%	60.02%	8.17%

Insider & Institutional Ownership

73.3% of PetMed Express shares are owned by institutional investors. Comparatively, 93.1% of Chewy shares are owned by institutional investors. 1.3% of PetMed Express shares are owned by insiders. Comparatively, 0.3% of Chewy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for PetMed Express and Chewy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PetMed Express	1	1	0	0	1.50
Chewy	0	7	18	1	2.77

Chewy has a consensus target price of $31.50, indicating a potential upside of 31.96%. Given Chewy’s stronger consensus rating and higher possible upside, analysts plainly believe Chewy is more favorable than PetMed Express.

Summary

Chewy beats PetMed Express on 14 of the 15 factors compared between the two stocks.

About PetMed Express

PetMed Express, Inc., together with its subsidiaries, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and other supplies for dogs, cats, and horses. It offers non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and household pet supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, dermatitis, thyroid, diabetes, pain medications, heart/blood pressure, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, and other pet supplies. It sells its products through its Internet website; mobile app; customer support center; and direct mail/print, which includes brochures and postcards. The company was incorporated in 1996 and is headquartered in Delray Beach, Florida.

About Chewy

Chewy, Inc., together with its subsidiaries, engages in the pure play e-commerce business in the United States. It provides pet food and treats, pet supplies and pet medications, and other pet-health products, as well as pet services for dogs, cats, fish, birds, small pets, horses, and reptiles through its retail websites and mobile applications. The company was founded in 2010 and is based in Plantation, Florida.