Chewy vs. DoorDash: As Consumers Tighten Their Wallets, Which Stock Can Thrive?

Whether you are buying kibble for a pet or ordering takeout for dinner, you likely interact with digital giants Chewy (NYSE:CHWY) and DoorDash (NASDAQ:DASH). But which is the better buy?

Chewy dominates the online pet supplies market with a subscription-heavy model that ensures predictable revenue. DoorDash serves as a logistics backbone for local delivery across diverse retail categories. Both companies utilize massive logistics networks to capture consumer spending, though their paths to profitability and valuation multiples vary significantly for investors.

The case for Chewy

Chewy has established itself as a leader among retail stocks by focusing exclusively on the pet category. The company sells food, supplies, and medications primarily through its website and mobile apps, serving over 21 million active customers. Its strategy relies heavily on the Autoship subscription program, which simplifies repeat purchases for pet parents and provides the business with high revenue visibility. Recently, the company expanded into physical services through Chewy Vet Care clinics and the acquisition of Modern Animal to deepen its relationship with customers.

In FY 2025, revenue reached nearly $12.6 billion, representing a growth rate of approximately 6.2% compared to the prior year. This steady increase in sales helped the company achieve net income of close to $222.8 million. While the net margin remains relatively thin at roughly 1.8%, the move into positive territory highlights a transition from early-stage expansion to a more mature and profitable operation. This stability is vital for investors looking for consistent performance in the specialty retail industry.

As of its February 2026 balance sheet, the debt-to-equity ratio is approximately 1.0x, which means its total debt is roughly equal to its shareholder equity. Its current ratio, a measure of a company's ability to cover its short-term debts with assets it expects to convert to cash within a year, is nearly 0.9x. In fiscal year 2025, the company generated free cash flow of approximately $562.4 million, which is calculated as cash flow from operations minus capital expenditures. Note that stock-based compensation represented roughly 43.1% of operating cash flow, which inflates reported cash generation since it is a non-cash expense added back in the cash flow statement.

The case for DoorDash

DoorDash operates a massive local commerce platform that connects merchants, consumers, and delivery workers across more than 40 countries. While it began with restaurant delivery, it has expanded into grocery stores, convenience stores, and other retail categories. The company leverages its DashPass membership program, which exceeded 35 million members by the end of 2025, to drive customer loyalty and more frequent orders. In addition to delivery commissions, the company generates revenue through advertising solutions for its merchant partners, creating a diversified income stream.

In FY 2025, revenue reached nearly $13.7 billion, showing robust growth of approximately 27.9% over the previous year. This rapid expansion was accompanied by a significant improvement in profitability, as the company reported net income of roughly $935.0 million. Its net margin reached approximately 6.8%, a substantial rise from previous years when the company was still reporting losses. The combination of high double-digit revenue growth and expanding profitability makes it a compelling option for those seeking momentum in the tech-enabled logistics space.

As of its December 2025 balance sheet, the debt-to-equity ratio is approximately 0.3x, indicating that total debt is much lower than shareholder equity. Its current ratio stands at nearly 1.4x, suggesting a strong ability to meet short-term financial obligations. The company generated impressive free cash flow of close to $1.8 billion in fiscal 2025. Note that stock-based compensation represented roughly 43.2% of operating cash flow, which inflates reported cash generation because this non-cash expense is added back during the accounting process.

Risk profile comparison

Chewy faces intense competition from e-commerce giants and large mass retailers. It specifically faces pressure from Amazon, which competes on price and delivery speed across the pet category. Operational risks include potential disruptions to its complex fulfillment network and a heavy reliance on third-party cloud infrastructure providers. Furthermore, the company must navigate strict legal and regulatory compliance requirements related to its pharmacy and veterinary services, where non-compliance could lead to significant sanctions or the loss of operating licenses.

DoorDash faces significant legal and regulatory challenges, particularly regarding the classification of its delivery drivers as independent contractors. Changes in labor laws could force the company to reclassify these workers, which would materially increase costs and complicate its operating model. The market for local delivery is also highly competitive, with Delivery Hero and other logistics platforms fighting for market share. Additionally, as the company processes vast amounts of sensitive personal data, it remains a target for cybersecurity attacks that could damage its brand reputation and lead to costly litigation.

Valuation comparison

Chewy offers a lower valuation through its P/S ratio, which measures market cap divided by sales over the past twelve months, while DoorDash trades at a higher Forward P/E based on future earnings estimates.

Valuation metrics include sourcing from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

Chewy and DoorDash both operate in the digital commerce and delivery spaces, taking products from order pages to customers' doorsteps. But as consumers battle ever-higher prices for basics like gas and groceries, can Chewy and DoorDash continue their growth trajectories? In the current economic environment, I'm looking at which company can keep customers coming back.

DoorDash is nearly 10 times the size of Chewy by market cap, and it's still growing much faster. It can use its blistering revenue growth to invest in improving its digital logistics network, which drives more orders and DashPass sign-ups. DashPass is the thing to watch here, as it can be a helpful measure of DoorDash's customer retention. In the second quarter, DashPass customers generated 75% of U.S. grocery and retail orders. DoorDash will report Q3 results on Nov. 4.

Chewy stock dropped 11% after its Q2 earnings release in September despite solid revenue growth as management pointed to continued pressure for the pet industry, evidenced by fewer treat and other discretionary sales. But it isn't all treats and toys at Chewy. While it continues to expand its pet health services, it also maintains a robust roster of Autoship customers, who comprise nearly 85% of its sales. The bulk of these sales come from consumables including food and medication, which aren't negotiable for pet owners.

Autoship sales jumped modestly year over year and net sales per active customer continued to increase in Q2. Despite its slower growth, I like Chewy as a more defensive play against a challenging consumer landscape. Plus, with the stock nearly cut in half over the past year, and valuations either lower than or in line with the broader industry average, Chewy stock may have room for a big improvement over the next year or so, provided it maintains or improves operational efficiency and keeps its loyal customers happy.

Sarah Sidlow has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Chewy, and DoorDash. The Motley Fool has a disclosure policy.