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Chewy (NYSE:CHWY) was started at a Buy rating at Roth MKM on Friday as the firm called out steady revenue streams and a large addressable market for the online pet retailer.
Equity analyst David Bellinger indicated that improving customer metrics, a path toward steadier profitability, and strong recurring revenues make the stock appealing.
“Our positive call centers around lighly predictable revenue streams make the CHWY model much more manageable from an expense standpoint, with built-in automation benefits set to steadily improve EBITDA margin expansion, ongoing secular opportunity within the growing $60B+ core pet food and consumables category, strengthened by the addition of higher margin complementary products, and self-funded growth through ample cash generation and a debt-free balance sheet to date,” he wrote.
He assigned a $52 price target to the stock alongside the Buy initiation. Shares of Chewy rose modestly during Friday’s premarket hours.
Read more on Wedbush’s recent upgrade of the stock.