Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>Chewy delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in earnings.</li><li>Customer engagement remained robust, driven by the industry-leading mix of nondiscretionary consumables and health, further fortified by the Autoship subscription service.</li><li>Addressing Black Friday and Cyber Monday performance, Chewy observed robust customer purchasing intent, surpassing expectations across all categories.</li></ul>

Chewy delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in earnings.Customer engagement remained robust, driven by the industry-leading mix of nondiscretionary consumables and health, further fortified by the Autoship subscription service.Addressing Black Friday and Cyber Monday performance, Chewy observed robust customer purchasing intent, surpassing expectations across all categories.

Chewy Inc.: The Vet Care Launch: Revolutionizing Pet Health Services! - Major Drivers

<ul><li>Chewy delivered a solid result and managed an all-around beat in the last quarter, producing mid-teens growth that exceeded expectations as well as strong profitability.</li><li>The number of active customers was almost steady sequentially, but the net sales per active customer, or NSPAC, rose by 15% to $530.</li><li>Net sales growth was boosted by active customer participation, highlighting the steadily growing strength of the Chewy ecosystem.</li></ul>

Chewy delivered a solid result and managed an all-around beat in the last quarter, producing mid-teens growth that exceeded expectations as well as strong profitability.The number of active customers was almost steady sequentially, but the net sales per active customer, or NSPAC, rose by 15% to $530.Net sales growth was boosted by active customer participation, highlighting the steadily growing strength of the Chewy ecosystem.

Chewy Inc.: Delving Into The Major Drivers Taking The Company Forward! - Financial Forecasts

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chewy-inc" target="_blank" data-smartkarma-citation="entities:28110:1" rel="noopener">Chewy (CHWY US)</a> reported a strong quarter but provided weak 3Q revenue guidance, pushing shares down over 10% on heavy volume during regular trading session.</li>
<li>
<a href="https://www.smartkarma.com/entities/chewy-inc" target="_blank" data-smartkarma-citation="entities:28110:1" rel="noopener">Chewy (CHWY US)</a> shares massively underperformed in 2023, with shares down ~34% year-to-date vs a 16% gain on the S&amp;P 500 index.</li>
<li>In July, Chewy CFO Mario Marte stepped down after 8 years in the company. He sold ~$10M worth of Chewy shares in 2023.</li>
</ul>



Chewy (CHWY US) reported a strong quarter but provided weak 3Q revenue guidance, pushing shares down over 10% on heavy volume during regular trading session.

Chewy (CHWY US) shares massively underperformed in 2023, with shares down ~34% year-to-date vs a 16% gain on the S&amp;P 500 index.
In July, Chewy CFO Mario Marte stepped down after 8 years in the company. He sold ~$10M worth of Chewy shares in 2023.


Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

<ul>
<li>Chewy will report 1QFY23 financial results after the market close on Wednesday, May 31, 2023. Management expects 1QFY23 net sales of between $2.72B and $2.74B, representing 12%-13% y/y growth.</li>
<li>I calculate that insiders such as CEO &amp; Director Mr. Singh, CFO Mr. Marte, and other management team sold ~$28M worth of Chewy shares during the last six months.</li>
<li>My bear case scenario suggests downside on the continued slowdown in consumables, hard goods sales, intense competition in the pet insurance and pet health care segments, and uncertain macro environment.</li>
</ul>


Chewy will report 1QFY23 financial results after the market close on Wednesday, May 31, 2023. Management expects 1QFY23 net sales of between $2.72B and $2.74B, representing 12%-13% y/y growth.
I calculate that insiders such as CEO &amp; Director Mr. Singh, CFO Mr. Marte, and other management team sold ~$28M worth of Chewy shares during the last six months.
My bear case scenario suggests downside on the continued slowdown in consumables, hard goods sales, intense competition in the pet insurance and pet health care segments, and uncertain macro environment.


Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

<ul><li>In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.</li><li>Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Chewy Inc.: Growing Market Share In Pet Products – Key Drivers

United States

Chewy, Inc. is an online retailer of pet food and other pet-related products. The Company through its retail website and mobile application offers pet food, treats, supplies, and healthcare products for dogs, cats, fish, birds, horses, and reptiles, as well as provides a range of pet clothing and medications. Chewy serves customers in the United States.

Chewy (CHWY US)

Chewy Inc.: The Vet Care Launch: Revolutionizing Pet Health Services! - Major Drivers

Chewy delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in...

Baptista Research

Chewy Inc.: Delving Into The Major Drivers Taking The Company Forward! - Financial Forecasts

Chewy delivered a solid result and managed an all-around beat in the last quarter, producing mid-teens growth that exceeded expectations as well...

Baptista Research

Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...

Andrei Zakharov

Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

I see further room for downside on the continued slowdown in consumables and hard goods sales, intense competition in the pet insurance and pet...

Andrei Zakharov

Chewy Inc.: The Vet Care Launch: Revolutionizing Pet Health Services! - Major Drivers

Chewy delivered a mixed result in the recent quarter, with revenues below market expectations, but it surpassed the analyst consensus in...

Baptista Research

Chewy Inc.: Delving Into The Major Drivers Taking The Company Forward! - Financial Forecasts

Chewy delivered a solid result and managed an all-around beat in the last quarter, producing mid-teens growth that exceeded expectations as well...

Baptista Research

Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

​Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...

Andrei Zakharov

Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

I see further room for downside on the continued slowdown in consumables and hard goods sales, intense competition in the pet insurance and pet...

Andrei Zakharov

Chewy Inc.: Growing Market Share In Pet Products – Key Drivers

In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability,...

Baptista Research

Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...