Is Chewy, Inc. overvalued or undervalued?

As of 24 October 2025, the valuation grade for Chewy, Inc. has moved from very expensive to expensive, indicating a slight improvement in perceived value but still suggesting overvaluation. The company is currently considered overvalued based on its high P/E ratio of 51, a price-to-book value of 76.52, and an EV to EBITDA ratio of 85.22. In comparison, peers such as Etsy, Inc. have a P/E of 20.43 and an EV to EBITDA of 13.97, highlighting Chewy's relative overvaluation.
Despite a strong ROE of 148.89%, the company's valuation ratios suggest it is priced significantly higher than its peers, which raises concerns about its sustainability. Additionally, Chewy's stock has underperformed against the S&P 500 over the 3-year and 5-year periods, with returns of -8.09% and -44.82%, respectively, compared to the S&P 500's 78.85% and 95.99%. This trend reinforces the notion that Chewy, Inc. may not justify its current valuation levels.