Chewy<\/strong> (CHWY +0.47%<\/span>)<\/span> stock has faced significant challenges in recent years, currently trading at nearly an 80% discount from its all-time high and almost 50% lower than its 52-week high, which raises concerns among potential investors.<\/p>\n However, despite these setbacks, Chewy has transformed into a profitable enterprise, and it has become increasingly clear that the recent sell-off in this consumer discretionary<\/b> stock may be overblown. This situation may present a favorable buying opportunity for Chewy stock for two key reasons.<\/p>\n Image source: The Motley Fool.<\/p>\n<\/div>\n <\/p>\n Investors may remember that Chewy stock soared during the pandemic, benefiting from increased pet ownership and spending. However, similar to other pandemic stocks, it experienced a sharp decline and struggled to regain its previous heights in the subsequent recovery attempts.<\/p>\n Today’s Change<\/p>\n (0.47%) $0.12<\/p>\n Current Price<\/p>\n $25.54<\/p>\n<\/div>\n<\/div>\n<\/div>\n Market Cap<\/p>\n $11B<\/p>\n Day’s Range<\/p>\n $25.19 – $26.06<\/p>\n 52wk Range<\/p>\n $22.74 – $48.62<\/p>\n Volume<\/p>\n 5.9M<\/p>\n Avg Vol<\/p>\n 8.3M<\/p>\n Gross Margin<\/p>\n 28.77%<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n Nevertheless, Chewy has consistently increased its revenue throughout this period. In fiscal 2025 (ending February 1), Chewy reported net sales of $12.6 billion, reflecting a 6% increase from the previous year’s figures. This growth contributed to a remarkable 125% surge in operating income, showcasing the company’s resilience and ability to adapt to market fluctuations.<\/p>\n It is essential for investors to be aware that a $241 million income tax benefit in 2024 significantly impacted its net income for that year, resulting in $223 million of net income in fiscal 2025, which is a decline from the $393 million reported in the prior year. Despite this drop, the company achieved $562 million in free cash flow, representing a 24% year-over-year increase, which gives Chewy more control over its future.<\/p>\n Additionally, investors should acknowledge Chewy’s competitive advantage in the market. Initially, it gained traction by offering prices comparable to Amazon<\/strong>, but with a commitment to superior customer service. This focus on customer satisfaction has been a hallmark of Chewy’s strategy and has helped it retain a loyal customer base.<\/p>\n Moreover, during the pandemic, Chewy capitalized on its position in the pet supply industry by introducing a range of pharmaceuticals for pets, including compounded medications, and services such as pet telehealth. The company is also expanding its footprint by opening veterinary clinics in various locations, which not only enhances its service offerings but also has the potential to boost sales in the future.<\/p>\n Moreover, years of fluctuating performance have positioned Chewy as an attractive stock for value investors seeking bargains.<\/p>\n![\"The](\"https:\/\/g.foolcdn.com\/image\/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F867753%2Fchwy_tmf.png&w=3840&op=resize\")
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\n<\/p>\n1. Analyze Chewy’s Consistent Sales Growth<\/h2>\n
![\"Chewy](\"https:\/\/g.foolcdn.com\/image\/?url=https%3A%2F%2Fg.foolcdn.com%2Fart%2Fcompanylogos%2Fmark%2FCHWY.png&w=128&op=resize\")
<\/div>\n<\/div>\nKey Data Points<\/h3>\n
2. Explore Chewy’s Attractive Valuation Metrics<\/h2>\n