Chewy Stock Muted Ahead of Earnings

The equity has a history of moving lower after earnings

Assistant Editor
Aug 31, 2021 at 12:54 PM
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Online pet supply retailer Chewy Inc (NYSE:CHWY) is gearing up for its second-quarter earnings report, due out after the close tomorrow, Sept. 1. Analysts expect Chewy to report a loss of 2 cents per share, and forecast a 29.3% rise in revenue from a year ago. Below, we'll take a look at the equity's chart performance ahead the event, and dig into Chewy's history of movement after earnings.

Chewy stock continues to rebound from its May 13 six-month low of $64.08, though its rally was cut short after being rejected by the $98 level earlier this month. The dip was saved by the 150-day moving average, a new trendline of support that previously had put pressure on the shares in mid April. Today, CHWY is relatively muted, down a paltry 0.8% to trade at $89.35, and remains just 0.7% below its year-to-date breakeven mark. 

CHWY Chart 2 August 31

Looking back at the company's last eight reports, Chewy stock has suffered six negative next-day returns, including a 5.8% dip after its most recent report in June. CHWY has averaged a post-earnings swing of 5.7%, regardless of direction, and this time around the options pits are pricing in a much bigger move of 11.8% for Thursday's trading. 

A short squeeze could put wind under Chewy stock's sails. Currently, short interest makes up a healthy 17.2% of the stock's total available float, and it would take nearly a week for shorts to buy back these bearish bets. 

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