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CHWY has had a contradictory week: the stock rallied 14% while short sellers added aggressively to their positions, a divergence that sets up an interesting test of conviction on both sides heading into the December 2 earnings date.
The short interest story has reversed sharply from last week's note. Seven days ago, bears were retreating. Now they are piling back in. Short interest climbed 35.7% over the past week to 14.0% of free float, the largest weekly percentage jump in the 30-day window and a swing from roughly 22.7 million shares short to 31.4 million. Over the past month, the short position has grown 43.8%. That is a meaningful re-engagement, not noise. Despite the size of the move, the borrow market is not signalling any stress. Availability sits at 421%, meaning more than four shares remain available to lend for every one currently borrowed. Cost to borrow has barely moved at 0.42%, near its lowest level of the past six weeks. Bears are building, but they are doing so cheaply and without constraint. The ORTEX short score ticked up to 59.4 from around 57 at the start of the week, the highest reading in the 10-day history shown, consistent with rising bearish positioning.
Options, meanwhile, have turned less defensive than they were. The put/call ratio dropped to 0.71, sitting below its 20-day average of 0.76 and roughly 0.9 standard deviations below it. Just two weeks ago the PCR was running above 0.82. The shift lines up with the stock's rally: call buyers have become more active as price momentum improved, even as short sellers moved the other way. That creates an unusual configuration. Options markets are leaning bullish while short positioning is building at its fastest pace in months.
The Street has a hold consensus, but most of the active price-target cuts came following the September 9 earnings print, when the stock fell 9.4% on the day and extended losses to 10.1% over five days. Goldman Sachs maintained its Buy rating but cut its target to $30 from $34. JP Morgan downgraded to Neutral with a $24 target. Morgan Stanley kept Overweight at $36. Mizuho, in the most recent action on September 29, maintained Outperform but lowered its target to $28 from $32. With the stock at $20.83, the Morgan Stanley target represents 73% implied upside, while the JP Morgan and Mizuho targets are roughly 15% to 35% above current levels. The bull case rests on Autoship's stickiness (84.6% of sales), seven consecutive quarters of active customer growth, and expanding adjacencies in pharmacy, advertising and vet services. The bear case points to slowing organic growth, gross margin pressure flagged by management itself for the third quarter, and a core business that is growing modestly against intensifying competition.
The alt data adds one concrete data point without requiring any inference. Chewy's buyback spend in Q2 (the April quarter) reached $200 million, a 766% increase on the same quarter a year earlier and the largest Q2 buyback on record for the company going back to 2024. That is a capital allocation signal worth noting alongside the insider picture, which shows only tax-withholding transactions (F-type) and a pre-arranged 10b5-1 plan sale from CEO Sumit Singh in August, none of which carry the conviction weight of discretionary open-market buying.
On the ownership register, Canada Pension Plan Investment Board disclosed an 8.7% stake in August, a fresh 13G filing representing 20.2 million shares and a new entrant to the register at that scale. BlackRock added nearly 1 million shares in the most recent quarter to reach 5.6% of shares. Baillie Gifford cut its holding sharply from 9.3% to 3.1%, and Wellington trimmed from 7.8% to 2.3%. BC Partners still holds 42.6% as the controlling shareholder, limiting the free float and amplifying the short interest percentage against it.
With earnings 48 days away, the question for next week is whether the stock's sharp rally can hold against a short base that is now growing at its fastest monthly rate in the data window, or whether sellers use the move as an opportunity to add at better levels.
See the live data behind this article on ORTEX.
Open CHWY on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data and reviewed by the ORTEX team. Content is informational only and does not constitute investment advice.
