CHWY is approaching its August 26 earnings date with short sellers dug in and the stock carrying a 15% monthly gain — a setup that pits a recovering price against a short book that hasn't flinched.
The short interest story has stabilised rather than escalated since last week's note. SI is running at 13.8% of the free float, representing roughly 31 million shares — fractionally below the 14% peak flagged earlier in the week, with a modest 0.6% rise over the past five sessions. What's changed is the direction of travel: the sharp accumulation phase that drove an 18% weekly jump in early August has plateaued. The ORTEX short score has eased slightly to 58.6 from a peak of 59.9 on July 27, suggesting the most aggressive phase of rebuilding may have passed. Bears are still there, but they stopped adding at speed.
The borrow market confirms the position is lightly leveraged. Availability has loosened to 419% — up notably from 361% on July 27, when utilisation hit its 52-week high — meaning there are now more than four shares available to borrow for every one already lent out. Cost to borrow is essentially flat at 0.51%, barely above where it was a month ago. With availability this loose and borrowing this cheap, the short book faces no mechanical squeeze pressure heading into earnings. Options positioning is modestly more cautious than usual: the put/call ratio of 0.70 sits about 1.5 standard deviations above its 20-day average of 0.66, but it remains well below last year's peak of 1.06. Hedging is picking up, not spiking.
The Street is constructive but has been walking down its ambitions. The most recent round of analyst moves — clustered around the June 10 earnings print — saw virtually every firm maintain its positive rating while cutting targets sharply. Goldman kept its Buy but reduced its target from $46 to $34; JP Morgan held Overweight but trimmed from $35 to $29; UBS, the lone Neutral voice, cut from $32 to $24. The consensus mean target now sits around $31, implying roughly 29% upside from current levels at $24.03. Bulls point to Chewy's autoship subscription flywheel and forward earnings momentum — the 12-month forward EPS growth estimate ranks in the 89th percentile of the universe. Bears flag slowing category growth and the limits of margin expansion in a competitive pet e-commerce market. Neither camp has moved since June; the analyst data is stale relative to today and should be read as a post-earnings reset rather than a fresh view.
One thread worth tracking in the ownership picture: BC Partners and PetSmart together hold around 86% of shares outstanding, leaving the genuine tradeable float thin. That concentration doesn't generate squeeze pressure given current borrow availability, but it does mean that institutional flow from the remaining free-float holders carries outsized weight. BlackRock added roughly 1.5 million shares through July 31, and Two Sigma entered or expanded a position of over 6 million shares as of March. Those are supportive signals from the institutional side, even as insiders have been consistently selling. CEO Sumit Singh sold nearly 72,000 shares across July 31 and August 3 alone — a combined value just under $1.7 million — joined by the CFO and division president in what reads as routine planned selling rather than a directional signal, though the pace is notable three weeks before a major earnings date.
The last earnings print, on June 10, produced a one-day move of -8% and a five-day loss of nearly 13% — the clearest recent data point for what a disappointing quarter looks like in price terms. The subsequent print on July 9 reversed that, with a +1.6% day-one reaction and +4.7% over five sessions. The August 26 release is therefore less about whether Chewy can show growth and more about whether the margin story has changed enough to justify a stock that has rallied 15% in a month while short sellers refused to cover.
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