Chewy vs. Shopify: Which Consumer Stock Is a Better Buy for 2027?

E-commerce is evolving as shoppers look for specialized experiences alongside broad marketplaces. Comparing pet specialist Chewy (NYSE:CHWY) and commerce platform Shopify (NASDAQ:SHOP) helps clarify which model might better serve investors through 2027.

Chewy focuses on deep customer loyalty in the resilient pet care market, while Shopify provides the digital infrastructure for millions of merchants worldwide. Both companies are expanding beyond their initial roots, yet they offer very different risk and reward profiles for investors looking to capitalize on the next wave of e-commerce growth.

The case for Chewy

Chewy provides a comprehensive e-commerce platform dedicated to pet products, prescriptions, and veterinary services. It partners with roughly 4,000 brands to serve millions of pet parents throughout the United States and Canada. The company emphasizes its Autoship subscription program, which drives recurring revenue and strengthens customer loyalty. Chewy has also expanded into healthcare with its pharmacy services and 18 veterinary care clinics.

In the 12 months ended Aug. 2, 2026, revenue reached around $13.1 billion, representing a growth rate of approximately 5.9%. During this same period, the company reported a net income of about $273.7 million. This performance highlights a steady increase in sales as the company scales its specialized offerings. The modest net margin of around 2.1% reflects the competitive nature of retail operations.

As of its February 2026 balance sheet, the debt-to-equity ratio was approximately 1.0x. This ratio measures total debt relative to shareholder equity, indicating how much the company relies on borrowed money. The current ratio was close to 0.9x, indicating the amount of short-term assets available to meet immediate liabilities. In the fiscal year ended Feb. 1, 2026, free cash flow reached roughly $562.4 million. Note that stock-based compensation accounted for roughly 43.1% of operating cash flow, inflating reported cash generation, since stock-based compensation is a non-cash expense added back in the cash flow statement.

The case for Shopify

Shopify provides the essential internet infrastructure that allows millions of merchants to run businesses across more than 175 countries. Its platform supports everything from small entrepreneurs to large enterprise brands. The company is a major player among retail stocks, offering services like Shopify Payments and Shopify Capital. This broad ecosystem creates high switching costs for merchants who rely on its integrated tools.

In the 12 months ended Sept. 30, 2026, revenue reached about $14.2 billion, fueled by a growth rate of around 32.5%. Net income for this period was approximately $2.1 billion. This significant growth demonstrates the platform's ability to capture a larger share of the global commerce market. The net margin stood at roughly 15%, which is considerably higher than typical retail business models.

As of its December 2025 balance sheet, Shopify maintained a debt-to-equity ratio of 0.0x. This figure indicates the company carries virtually no debt relative to its equity. Its current ratio was approximately 6.0x, showing a very strong ability to cover short-term obligations. In the fiscal year ended Dec. 31, 2025, free cash flow was about $2.0 billion. Note that stock-based compensation represented roughly 22.1% of operating cash flow, which inflates reported cash generation since stock-based compensation is a non-cash expense added back in the cash flow statement.

Risk profile comparison

Chewy faces intense pressure from large retailers and e-tailers, particularly those with massive capital resources like Amazon.com Inc. (NASDAQ:AMZN). It also depends heavily on third-party logistics and shipping providers to reach its customers. Any disruptions in fulfillment center operations or cybersecurity failures could harm its reputation or lead to regulatory penalties. Furthermore, its controlled company status means a small group of stockholders holds significant influence over major corporate decisions.

Shopify operates in a rapidly evolving market where it must constantly compete to attract and retain merchants. It relies on third-party providers for critical functions, including Alphabet (NASDAQ:GOOGL) for cloud hosting and companies like Stripe or PayPal (NASDAQ:PYPL)for payment processing. Changes in the regulatory environment governing artificial intelligence or online financial services could also impact its growth. Finally, the concentration of voting power through special share classes limits the influence of regular retail investors.

Valuation comparison

Chewy appears much more affordable on both earnings and sales metrics, whereas Shopify carries a premium price reflecting its much faster growth rates.

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

The Forward P/E, which compares the stock price to future earnings estimates, highlights a sharp contrast between the two. The P/S ratio measures market capitalization relative to sales over the past twelve months.

Which stock would I buy for 2027?

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 2027, sales are seen rising 7% to $13.5 billion, with net income up more than 40% to around $317 million, according to consensus analyst estimates. American consumers have shown they will spend up to take care of their pets.

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).

Shopify is coming off an excellent quarterly report, tallying third-quarter fiscal 2026 revenue of $3.74 billion, up 32% year over year. It's the business's fourth-ever quarter of more than $3 billion in revenue, a mark it first chalked up in 2025. It is interesting to note that the business is growing much faster than the retail industry it serves.

Shopify appears ready to benefit from the age of agentic AI merchandising, which is just getting off the ground. Shopify supports the UCP from the Google arm of Alphabet, designed to enable agentic AI commerce by allowing AI agents to interact with merchant systems throughout the shopping journey. That, along with other trends, has management projecting low-30% annual revenue growth for the current year. Long-term, management aims to expand in Europe to drive additional growth.

Shopify is growing fast, but its stock comes at a nose-bleed premium. Chewy is less flashy, but also more predictable, thanks to its Autoship stability. It's priced at a premium too, compared to the average S&P 500 stock, but it's the more affordable buy for long-term investors.

Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Chewy, PayPal, and Shopify. The Motley Fool recommends the following options: short December 2026 $62.50 calls on PayPal. The Motley Fool has a disclosure policy.