Chewy Stock Shows Signs of Becoming Next '10-Bagger' According to Peter Lynch Blueprint
Peter Lynch's Magellan fund averaged a 29.2% annual return between 1977 and 1990, thanks in part to his strategy of identifying '10-bagger' stocks that could increase $1,000 investments to $10,000 over time.
Chewy (CHWY) is one such stock that fits Lynch's criteria, according to recent analysis. One reason is its qualitative characteristics: Chewy offers a level of customer service unmatched by competitors like Amazon, including 24/7 representatives and pet telehealth services.
Another key factor is Chewy's continued financial growth. Despite the pandemic's end, Chewy saw a 7% increase in net sales in Q1 2026 and a 51% boost in net income during the same period. Its PEG ratio has also fallen to 0.1, meeting Lynch's valuation requirements.
Chewy's market cap is currently $9.4 billion, making it a mid-cap stock with room for growth. If it were to recover to its all-time high, it would be halfway to becoming a 10-bagger stock. Additionally, Chewy has begun expanding into Canada and could potentially replicate the success of Petco in international markets.