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CNBC
17 hours ago
- Business
- CNBC
Top Wall Street analysts like these three stocks for long-term growth
The Middle East conflict and macro uncertainty are expected to keep global stock markets volatile, so it would be prudent for investors to ignore short-term noise and pick names with solid growth prospects. To this end, top Wall Street analysts' research can be a key consideration for investors who are picking out stocks and seeking names with long-term potential. Here are three stocks favored by the Street's top pros, according to TipRanks, a platform that ranks analysts based on their past performance. We start this week with online pet retailer Chewy (CHWY). The company recently delivered solid revenue and earnings for the first quarter of fiscal 2025. However, investors were concerned about some aspects, including the decline in free cash flow. Reacting to the Q1 FY25 performance, JPMorgan analyst Doug Anmuth increased his price target for CHWY stock to $47 from $36 and reiterated a buy rating, saying that the post-earnings sell-off in the stock seems overdone. TipRanks' AI analyst has an outperform recommendation on CHWY stock, with a price target of $46. Anmuth stated that he remains bullish on Chewy stock due to its strong execution, growth in active customers, and profitability ramp. He expects sponsored ads, product mix and fixed cost leverage to drive a multi-year profitability ramp. "We believe CHWY is capturing share from AMZN/WMT supported by hardgoods, product mix shift, consumables, AutoShip, & efficient marketing, while improving industry trends would be a tailwind," the analyst said. Anmuth views Chewy's full-year revenue outlook as conservative, given that the company is tracking towards the upper half of its guidance range. He highlighted that the 240,000 sequential increase in Q1 2025 Active Customer marked the fourth consecutive quarter of growth. He also pointed out improvements in other metrics like gross additions, reactivations and retention. Anmuth ranks No. 42 among more than 9,600 analysts tracked by TipRanks. His ratings have been profitable 65% of the time, delivering an average return of 21.9%. See Chewy Ownership Structure on TipRanks. Next on this week's list is social media platform Pinterest (PINS). Recently, the company entered into a partnership with Instacart, under which advertisements on Pinterest will become directly shoppable via Instacart. Reacting to the collaboration, Bank of America analyst Justin Post reaffirmed a buy rating on PINS with a price target of $41. TipRanks' AI analyst has assigned an outperform rating on PINS stock, with a price target of $37. Post said that advertisers can capitalize on Instacart's first-party purchase data to target Pinterest users. The analyst highlighted that in the initial phase, select brands can reach Pinterest users based on real-world retail purchase behavior captured by Instacart. The second phase will introduce a "closed-loop measurement," enabling advertisers to see how Pinterest ads lead to product sales across Instacart's network of over 1,800 retail partners. Overall, this partnership will provide more precise ad campaign insights and performance tracking. Post noted the rise in PINS stock in reaction to this deal and potentially favorable Q2 ad data. The top-rated analyst thinks that the partnership is a "good fit as CPG [consumer packaged goods] is one of Pinterest's largest verticals (cooking and recipes also popular), and the closed loop attribution on campaigns will likely be valued by advertisers." If successful, Post thinks that the partnership could drive incremental ad spend by CPG clients. He remains constructive on Pinterest due to artificial intelligence (AI) enhancements that seem to be fueling user engagement and improved ad performance, with AI ramp still in the early stage. Post ranks No.23 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 69% of the time, delivering an average return of 22.9%. See Pinterest Insider Trading Activity on TipRanks. We move to Uber Technologies (UBER), a ride-sharing and delivery platform. Recently, Stifel analyst Mark Kelley initiated a buy rating on UBER stock with a price target of $110. The analyst stated that he views UBER as a "super app" offering multiple reasons to use its platform, like commuting, ordering food and delivery. Commenting on whether the emergence of autonomous vehicles (AVs) is a risk or opportunity, Kelley said that AVs present minimal risk to Uber's business over the near-to-medium term due to some hurdles, like safety, clarity on regulatory framework, cost of manufacturing AVs and large investments needed to support an AV fleet. In fact, the analyst thinks that the long-term risk from AVs is also unclear currently due to a wide range of potential outcomes. Kelley is optimistic that Uber is well-positioned to meet or surpass the financial targets set in 2024, thanks to its solid execution. He expects gross bookings growth of 16% each in 2025 and 2026, supported by continued expansion into non-urban areas and internationally, with persistent adoption of UberOne. Moreover, Kelley expects earnings before interest, taxes, depreciation and amortization growth to be higher than gross bookings and revenue growth in 2025 and 2026. Finally, Kelley is confident that Uber will eventually be successful in Delivery, which also facilitates customer acquisition, mainly in less dense/non-urban areas. He expects initiatives like Uber One and increased supply to boost Delivery bookings ahead. Kelly is also bullish on the greater retail media sub-segment of digital ads, as Uber has several advantages, like access to location data. Like Kelley, TipRanks' AI analyst is also bullish on UBER stock, with a price target of $108. Kelley ranks No.119 among more than 9,600 analysts tracked by TipRanks. His ratings have been successful 67% of the time, delivering an average return of 25.3%. See Uber Technologies Statistics and Valuation on TipRanks.
Yahoo
11-06-2025
- Business
- Yahoo
CHWY Q1 Earnings Call: Customer Growth, AutoShip, and Vet Care Expansion Drive Results
E-commerce pet food and supplies retailer Chewy (NYSE:CHWY) announced better-than-expected revenue in Q1 CY2025, with sales up 8.3% year on year to $3.12 billion. Its non-GAAP profit of $0.35 per share was 3.2% above analysts' consensus estimates. Is now the time to buy CHWY? Find out in our full research report (it's free). Revenue: $3.12 billion vs analyst estimates of $3.08 billion (8.3% year-on-year growth, 1.1% beat) Adjusted EPS: $0.35 vs analyst estimates of $0.34 (3.2% beat) Adjusted EBITDA: $192.7 million vs analyst estimates of $190.7 million (6.2% margin, 1.1% beat) Operating Margin: 2.5%, in line with the same quarter last year Market Capitalization: $19 billion Chewy's first quarter performance was shaped by continued gains in active customers and increased engagement with its core AutoShip subscription service. CEO Sumit Singh described AutoShip as a 'pillar of strength and differentiation,' with AutoShip customer sales outpacing overall growth and making up a record share of total revenue. The company also highlighted improved retention and higher quality of new customer cohorts, attributed to a refreshed product assortment and enhancements to the overall customer experience. Notably, Chewy reported double-digit year-over-year growth in hard goods, reflecting efforts to improve inventory management and assortment. Management also pointed to successful cost control, as disciplined operating expense management helped support steady profitability. Looking ahead, Chewy's leadership is focused on expanding strategic initiatives such as Chewy Vet Care (CVC) clinics and the Chewy Plus membership program, both expected to deepen customer loyalty and broaden revenue streams. CFO David Reeder reiterated that AutoShip and loyalty programs remain central to driving recurring sales, while management believes that growing its sponsored ads business and scaling CVC clinics will meaningfully contribute to margin expansion and customer engagement. The company's outlook assumes modest industry-wide growth, with Chewy aiming to outpace the sector by increasing market share through execution on customer acquisition and retention. Singh emphasized, 'Key verticals like health, sponsored ads, and private brands remain early in their life cycles,' signaling that these areas are expected to play larger roles in Chewy's long-term strategy. Chewy's management attributed the quarter's performance to stronger AutoShip adoption, customer growth, and solid progress in new businesses such as Chewy Vet Care and sponsored ads. AutoShip momentum: Chewy's AutoShip subscription sales grew faster than overall revenue, now representing 82% of net sales. Management credited the program's convenience and customer loyalty benefits for driving both retention and repeat purchases. Hard goods recovery: The company saw 12.3% year-over-year growth in hard goods sales, which management connected to refreshed product assortments and improved inventory management. This segment had previously lagged, but efforts to boost discoverability and engagement yielded stronger results. Active customer growth: Chewy ended the quarter with 20.8 million active customers, a 3.8% year-over-year increase. Management attributed this to higher gross customer additions and lower churn, supported by ongoing investments in marketing and a wider product selection. Sponsored ads expansion: Management highlighted continued growth in sponsored ads, driven by the migration to a first-party advertising platform and the introduction of new ad formats. Off-site advertising is ramping up, with demand from partners exceeding internal expectations. Vet clinic rollout: Chewy expanded its Chewy Vet Care (CVC) clinic footprint to 11 locations across four states, with further expansion planned. Management stated that CVC clinics are generating demand and contributing to broader ecosystem engagement, reinforcing Chewy's long-term health and wellness strategy. Chewy's management expects recurring revenue streams and new verticals like veterinary care to drive growth, while maintaining margin discipline despite some industry headwinds. Recurring revenue focus: Management stated that the AutoShip program and Chewy Plus membership are expected to sustain growth in active customers, repeat purchases, and wallet share. These programs are seen as the foundation for predictable revenue and increased customer lifetime value. Vet care and health initiatives: The rollout of Chewy Vet Care clinics is anticipated to broaden Chewy's addressable market and enhance customer engagement. Management noted that these clinics, alongside pharmacy and pet health services, are early in their growth cycle and could increase cross-selling opportunities. Margin drivers and risks: Leadership expects gross margin improvements to come from expanding higher-margin categories like sponsored ads and private brands. However, they cautioned that seasonality, investment timing, and minimal tariff impacts could introduce volatility in expense trends throughout the year. In coming quarters, the StockStory team will closely monitor (1) the pace of AutoShip and Chewy Plus membership growth and their impact on customer retention; (2) Chewy Vet Care clinic expansion and signs of ecosystem benefits from integrating health services; and (3) continued growth in sponsored ads and its contribution to gross margin. The ability to maintain margin discipline while investing in new initiatives will also be an important indicator of long-term execution. Chewy currently trades at a forward EV/EBITDA ratio of 26×. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today.
Yahoo
07-03-2025
- Business
- Yahoo
Tractor Supply Maintains Margins While Funding Growth
Tractor Supply Company (NASDAQ: TSCO) held its fourth-quarter and fiscal-year 2024 earnings call on January 30, 2025. The company delivered record financial results and outlined its strategic growth initiatives. Management expressed confidence in its "Life Out Here 2030" strategy, which expands the company's total addressable market to $225 billion. For long-term investors, three key developments particularly stand out for understanding the company's future growth trajectory. Tractor Supply's impressive customer metrics demonstrate strong loyalty and engagement despite challenging retail conditions, suggesting its differentiated rural lifestyle focus continues to resonate. Front-line team member attrition is at a record low. Total active customer accounts are at record highs. High-value customer retention is at record levels. Customer service scores continue to hit all-time highs. Our Neighbor's Club, one of the largest loyalty programs in retail, continues to attract record levels of new customers, and we're exiting 2024 with all-time highs in both retention rates and retained customer counts. Neighbor's Club membership now exceeds 38 million and represents a record 80% of sales. The program continues to drive deeper customer relationships and increased cross-shopping, with its Petsense shoppers cross-shopping Tractor Supply at "an impressive rate of 50%, an increase of nearly 3 points year-over-year." The Allivet acquisition represents a significant push into the pet medication space, providing entry into a $15 billion market that complements Tractor Supply's existing pet business. The acquisition of Allivet expands our total addressable market by $15 billion to $225 billion. Allivet has a proven platform to make pet ownership easier by providing convenient access to brand-name medications, expert pharmacy advice, and convenient reordering with its AutoShip program. This strategic acquisition not only expands Tractor Supply's total addressable market but is expected to contribute more than $100 million to net sales in 2025 and be accretive to earnings. Management sees long-term potential for Allivet to match or exceed Tractor Supply's operating margins as the integration progresses. Tractor Supply is strategically investing in new growth initiatives while offsetting these costs through gross margin expansion, allowing the company to maintain consistent operating margins. We forecast the gross margin expansion to be offset by SG&A deleverage due to a couple of primary factors. First, depreciation and amortization is anticipated to increase about 10% with a higher growth rate in the first half as compared to the second half of the year. ... Second, we're investing in our Life Out Here 2030 strategic initiatives. In order to launch our direct sales and final-mile initiatives, we're planning a net investment of about 15 to 20 basis points of operating margin into these exciting opportunities for growth. The company expects modest gross margin expansion of 20 to 40 basis points in 2025, driven by supply chain efficiencies and effective cost management. However, this improvement will be balanced against increased SG&A costs for strategic initiatives, resulting in an operating margin forecast of 9.6% to 10%, centered around 2024's performance. With new store growth accelerating to 90 locations in 2025, the Allivet acquisition expanding the addressable market, and strategic investments in direct sales and final-mile delivery, Tractor Supply appears well-positioned to continue executing on its long-term growth strategy. Management is particularly focused on supply chain optimization, enhancing localization capabilities, integrating Allivet's pet medication business for Neighbor's Club members, and launching both direct sales and final-mile delivery initiatives. As CFO Kurt Barton emphasized, "We have a long track record of successfully managing through diverse market conditions. The needs-based nature of our business, combined with our deep understanding of these dynamics, allows us to proactively adapt to the market conditions." Before you buy stock in Tractor Supply, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Tractor Supply wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $699,020!* Now, it's worth noting Stock Advisor's total average return is 863% — a market-crushing outperformance compared to 173% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of March 3, 2025 David Kretzmann has positions in Tractor Supply. The Motley Fool has positions in and recommends Tractor Supply. The Motley Fool has a disclosure policy. Tractor Supply Maintains Margins While Funding Growth was originally published by The Motley Fool
