Chewy Is Down 30% in 2026. Is This a Once-in-a-Lifetime Buying Opportunity?

Chewy (NYSE: CHWY) is a company your pets surely like, as it sells everything from their favorite foods to toys and other supplies. But investors haven't liked this e-commerce stock much lately, as it's dropped nearly 30% this year.

There isn't one major reason for this, as Chewy has successfully grown its business in recent years and, thanks to a metric I'll talk about in a minute, offers investors a clear view of revenue to come -- and things are looking positive. Sometimes a stock declines because investors are interested in other opportunities at a given moment -- and it isn't a reflection of the stock's prospects. I think this is what we're seeing with Chewy.

Does all of this mean that Chewy may represent a once-in-a-lifetime buying opportunity right now? Let's find out.

Image source: Getty Images.

Chewy's big milestone

Chewy has delivered revenue growth in recent years and reached the major milestone of profitability. Initially, the company stuck to the area of e-commerce uniquely in the U.S. But it has expanded the e-commerce business into Canada and, in the U.S., has added veterinary clinics to its repertoire.

CHWY Revenue (Annual) data by YCharts

The vet clinics business is a fantastic idea because it diversifies the revenue stream and, at the same time, offers Chewy the opportunity to bring new customers to its e-commerce business. The clinics are a great way to introduce Chewy to pet parents who haven't yet discovered or tried the e-commerce site.

The power of Autoship

Now, here's what I like most about Chewy: More than 80% of the company's total sales come from recurring customers. We know this because the Autoship service makes up that percentage of revenue -- Autoship automatically sends your favorite products to you on a schedule you determine. The idea that regular customers are driving sales is fantastic because it offers us visibility on sales in the coming quarters. It also shows us that customers like Chewy enough to keep coming back.

As mentioned above, all of this isn't reflected in Chewy's stock performance, and that's left the stock trading at 15x forward earnings estimates, down from more than 30x less than a year ago. This is a very reasonable level considering the points I've mentioned above.

It's impossible to predict exactly when Chewy stock will rebound and advance, but the company has what it takes to climb over the long run: a track record of revenue growth, successful expansion, and recurring customers driving growth. All of this makes Chewy a fantastic stock to buy and hold onto for the long term. And today's valuation means it could be a once-in-a-lifetime buying opportunity right now.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Chewy. The Motley Fool has a disclosure policy.