Chewy vs. Coupang: Which E-Commerce Stock Is a Better Buy in 2026?

Investors choosing between Chewy (NYSE:CHWY) and Coupang (NYSE:CPNG) are weighing specialized pet care loyalty against a diversified e-commerce giant dominant in the South Korean market. Both companies seek long-term growth.

Chewy focuses on the resilient pet category, using its Autoship program to create recurring revenue from pet parents. Coupang functions as an everything app for South Korea, offering lightning-fast delivery, streaming, and food delivery. Comparing them helps you decide between a niche leader and a regional powerhouse among retail stocks.

The case for Chewy

Chewy operates as an e-commerce leader specializing in pet food, supplies, and healthcare services. A central part of its strategy involves the Autoship subscription program, which simplifies recurring purchases and builds long-term loyalty. Offering nearly 190,000 products, it serves a large audience across the United States and Canada. Beyond retail, the company is expanding into professional services through its PracticeHub platform, which is currently used by roughly 20,000 veterinary practices to manage prescriptions and inventory.

As reported in its latest annual filing, in FY 2025, revenue reached nearly $12.6 billion, representing a growth rate of approximately 6.2% compared to the previous year. This steady top-line expansion helped the company achieve a net income of roughly $222.8 million for the period. A net margin of roughly 1.8% demonstrates progress in scaling the business. The company serves over 21 million active users who rely on its 24/7 customer care and broad product selection.

As of its February 2026 balance sheet, the debt-to-equity ratio was roughly 1.1x, which measures a company's total debt against its shareholder equity. The current ratio, which compares short-term assets to short-term liabilities, was approximately 0.9x. During the fiscal year, free cash flow reached nearly $562.4 million, calculated by subtracting capital expenditures from operating cash flow. Note that stock-based compensation represented roughly 43.1% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

The case for Coupang

Coupang has established itself as the dominant e-commerce force in South Korea, providing everything from grocery delivery to video streaming. The company operates a proprietary logistics network that enables its signature Rocket Delivery service, often reaching customers within hours. This infrastructure supports a wide ecosystem including food delivery through Coupang Eats and fintech services via Coupang Pay. To sustain growth, the company is expanding into the Taiwan market and integrating its acquisition of luxury retailer Farfetch. Aggregating products from thousands of merchants, it serves nearly 24.7 million active product-commerce customers.

According to its most recent annual results, in FY 2025, revenue grew roughly 14.1% to nearly $34.5 billion. Top-line expansion resulted in a net income of approximately $208.0 million and a net margin of roughly 0.6%. The growth was driven by continued adoption of its subscription services and expansion into new geographic regions. This narrow net margin reflects the significant investment required to maintain a massive logistics network across its primary markets.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 1.0x, indicating a balanced split between debt and equity financing. The current ratio sat at roughly 1.0x, suggesting the company has enough short-term assets to meet its immediate obligations. Free cash flow for the fiscal year was close to $522.0 million. Note that stock-based compensation represented roughly 26.8% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

Risk profile comparison

Chewy faces operational risks associated with managing its rapid expansion and the capacity of its fulfillment centers. The company relies heavily on third-party dependencies, including data center hosting provided by Amazon (NASDAQ:AMZN), and remains vulnerable to supply chain disruptions. Furthermore, the competitive landscape in the pet retail and pharmacy sectors is intense, with pressure coming from both mass merchandisers and other e-commerce platforms. Regulatory and litigation risks, including product liability and pet health service oversight, also present potential challenges to its growth trajectory.

Coupang deals with significant cybersecurity risks, particularly following a November 2025 data incident that impacted millions of customer accounts. This event has led to ongoing legal investigations and potential class action litigation that could impact the company's financial performance. Additionally, the company faces regulatory scrutiny in South Korea regarding labor standards and fair trade practices. Macroeconomic and geopolitical tensions on the Korean peninsula also pose risks to its core operations. Integrating new business units like Farfetch further adds to the operational complexity of managing its global expansion.

Valuation comparison

Chewy appears more attractively priced on an earnings basis with its lower Forward P/E, which compares its stock price to estimated future earnings. Both companies trade at similar P/S ratio levels, a metric that measures the stock price against annual revenue per share.

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

Which stock would I buy in 2026?

I'd go with Coupang. The scale of its opportunity and the breadth of what it has built across South Korea's e-commerce and fintech markets put it in a different category from Chewy entirely. Despite a complicated recent quarter weighed down by the aftermath of a data breach that damaged customer trust, the underlying commerce business grew at a healthy double-digit rate and customer spending among loyal members has returned to pre-incident levels.

Chewy is not without its strengths. Autoship sales provide a steady, predictable revenue base for the company and active customers are growing. Its expansion into pet health gives the company a new avenue for growth. For investors who want a focused, subscription-driven consumer business with a loyal customer base, this is a solid stock to own.

But Chewy is growing modestly in a mature market with a visible ceiling. Coupang is still in the early stages of capturing a digital economy across an entire country, with fintech, logistics, and fresh grocery adding new growth dimensions that Chewy simply cannot match. For investors with a long time horizon, the size of Coupang's opportunity makes it the stronger pick despite the near-term complications.

Sara Appino has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Chewy. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.