CHWY survived its Q1 2026 earnings event with a modest gain, yet the short book has barely flinched — leaving the stock in an unusual post-earnings limbo where the bears refused to cover and the Street is still trimming targets.
The reaction to the July 9 print was muted. The stock added just 1.6% on the day, closing at $20.88 — up a fraction on the week and roughly 2% on the month. That is a far cry from the stock's prior earnings pattern: the June 10 report sent shares down nearly 8% in a single session and 13% over the following five days. Thursday's relief was real, but context matters — the stock remains well below the $25-plus levels it held in early May.
The short book told the same story post-earnings that it told going in. Short interest dipped 1.6% on July 9 to 12.75% of the free float — roughly 28.7 million shares — but that one-day retreat barely dents a position that grew 4.2% on the week and more than 10% over the past month. The short score has edged down very slightly to 56.9 but remains firmly elevated relative to where it was in mid-June, when it was running nearer 54. Borrow conditions offer no friction: availability is 537% relative to shares already on loan, meaning there are more than five lendable shares for every one borrowed, and cost to borrow is negligible at 0.46%. The shorts built into earnings and have not unwound. That is a deliberate choice, not a stuck position.
Options tell a calmer story than the short interest level might imply. The put/call ratio eased to 0.62 this week, marginally below its 20-day average of 0.64 and roughly in line with the range it has occupied since mid-June. That is a meaningful shift from earlier in the year, when the PCR was running above 0.87 in late May and early June. Hedging demand has normalised since the post-earnings selloff; options traders are neither pressing new downside bets nor rushing to chase upside. The positioning looks balanced rather than charged.
The Street absorbed the Q1 print with limited movement. The wave of target cuts happened in the days immediately following the June 10 results — Goldman Sachs cut to $34 from $46, JPMorgan dropped to $29 from $35, and RBC took its target down to $34 from $47, all while maintaining positive ratings. UBS trimmed to $24 from $32 at Neutral. The consensus mean target now sits near $31 against a stock trading at $20.88, implying roughly 49% upside to the Street's central estimate. Bulls point to autoship loyalty, the veterinary clinic build-out, and Chewy's 12-month forward EPS growth trajectory — ranked in the 89th percentile on that factor. Bears counter that delivery advantages are eroding and margin expansion is structurally limited. The EV/EBITDA of 7.3x and PE near 10.9x are undemanding multiples if the growth case holds, but the short book suggests plenty of investors are not yet convinced it will.
On the ownership side, one feature stands out. Insider activity has been uniformly one-directional. CEO Sumit Singh sold $2.1 million worth of shares on May 4 and another $171,000 on June 1. The CFO and Chief Accounting Officer sold smaller parcels on the same June date. Net insider selling across the past 90 days totals roughly $3.4 million across all trades. None of these are outsized sales relative to company size, but the direction — every single transaction a sell — runs against any narrative that insiders are stepping in to buy the dip.
The next scheduled catalyst is the Q2 2026 earnings report, due August 26. Between now and then, the key questions are whether the short book finally starts to unwind following the muted but positive Q1 reaction, or whether the 10%-plus monthly build in short interest continues toward new highs for the year.
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