Booking vs. Chewy: Do Pet Treats or Plane Tickets Make for a Better Stock in 2026?

Investors often weigh the stability of established service giants against the growth potential of specialized retail leaders. Comparing Booking Holdings Inc. (NASDAQ:BKNG) and Chewy Inc. (NYSE:CHWY) reveals two distinct paths for long-term capital.

Booking operates a massive online travel platform, connecting millions of travelers to accommodations globally. Chewy focuses on the pet care market, blending e-commerce convenience with a specialized health services ecosystem. While both companies rely on consumer discretionary spending, their business models and margin structures offer very different risks and rewards for retail investors.

The case for Booking Holdings

Booking sells travel-related services to global consumers through brands such as Agoda, Priceline, and OpenTable. In its latest annual report, the company highlights a network of roughly 4.7 million accommodation properties available on its primary platform. The business facilitates bookings by connecting travelers with service providers and advertising partners like Alphabet Inc. (NASDAQ:GOOG).

In FY 2025, revenue reached about $26.9 billion, representing growth of approximately 13.4% compared to the prior year. Net income for the period was around $5.4 billion, which resulted in a net margin of roughly 20.1%. This performance continued a steady upward trend from the $23.7 billion in revenue reported in the previous fiscal year.

As of its December 2025 balance sheet, the debt-to-equity ratio was negative 3.5x, which means total liabilities exceed shareholder equity. The current ratio, which measures the ability to pay short-term obligations with assets, was approximately 1.3x. Free cash flow for the period reached roughly $9.1 billion, calculated as cash flow from operations minus capital expenditures.

The case for Chewy

Chewy serves pet parents through its e-commerce platform, offering a wide range of supplies and a growing suite of healthcare services. The company has significantly expanded its travel and tourism stocks footprint in the pet health space, recently acquiring Modern Animal to reach 47 veterinary clinic locations. It also maintains approximately 20,000 veterinary practices on its PracticeHub platform, which represents roughly half of all clinics in the United States.

In FY 2025, revenue reached about $12.6 billion, a growth rate of roughly 6.2% over the previous year. Net income for the same period was approximately $222.8 million, resulting in a net margin of about 1.8%. While this net margin is slim, it reflects the company's focus on capturing market share in the competitive pet retail space.

As of its February 2026 balance sheet, its current ratio stood at roughly 0.9x. The debt-to-equity ratio was nearly 1.0x, meaning its total debt is roughly equal to its shareholder equity. Note that stock-based compensation (SBC) represented roughly 43% 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

Booking faces intense global competition from major technology companies and AI native platforms like Airbnb Inc. (NASDAQ:ABNB). The company is also heavily dependent on third-party search and mobile platforms for traffic and visibility. Furthermore, regulatory scrutiny in the European Union regarding its status as a digital gatekeeper could impact its operational flexibility and partner relationships.

Chewy contends with significant pressure from omnichannel retailers and mass merchants like Amazon.com Inc. (NASDAQ:AMZN). Its reliance on third-party cloud infrastructure and national logistics providers creates potential vulnerabilities in its supply chain. Additionally, the company faces regulatory risks in the pharmacy sector and potential conflicts of interest due to the influence of its controlling stockholders.

Valuation comparison

Booking appears to offer a lower valuation based on future earnings estimates, while Chewy trades at a much lower multiple of its trailing twelve-month sales.

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

The P/S ratio measures the stock price relative to sales over the past twelve months. The Forward P/E measures the stock price relative to future earnings estimates.

Which stock would I buy in 2026?

Chewy is establishing a steady growth pattern. In a recently reported quarter, management noted that its Autoship program grew faster than overall sales, implying that many customers' standing orders will continue to provide a solid base for the company. The company also believes that in the long run, veterinarian and general pet health services are a huge untapped market for Chewy. The business recently closed on the acquisition of Modern Animal, which delivers high profitability per location and is a strong complement to Chewy's existing business.

For fiscal 2026, sales are seen rising 7% to $13.5 billion, with net income up nearly 50% to $333 million, according to consensus analyst estimates.

However, Chewy likely doesn't have a great competitive moat against brick-and-mortar competitors like PetSmart and Petco Health and Wellness Co Inc. (NASDAQ:WOOF).

Booking Holdings, meanwhile, is successfully shifting from an agency model to a primarily merchant model. That means it used to make its money as an agent--connecting travelers to a hotel and collecting a commission while the hotel manages collecting payment from the traveler. In the merchant model, Booking "buys" capacity from hotels and other providers on its platform and collects payment directly from the traveler. This tends to lead to fatter margins.

The company is also in excellent financial shape. It has $16 billion in cash, which makes its balance sheet investment grade. A plus for shareholders, the company has a $20 billion share buyback program. The brand is increasingly a destination for travelers, which means it is paying less to companies like Google for search engine visibility. Today, two-thirds of Booking.com's visitors are "organic," meaning they are direct visitors rather than from paid ad traffic.

Revenue will grow about 9% this year to $29.3 billion. But net income takes a healthier 50% leap to about $8.1 billion.

Choosing between these two, and weighing their various positives and negatives, comes down to valuation. Booking Holdings has a much more reasonable forward price-to-earnings ratio, and therefore it's the choice here, under the approach of looking to buy good stocks at good prices.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Airbnb, Alphabet, Amazon, Booking Holdings, and Chewy. The Motley Fool has a disclosure policy.