CHWY enters its June 10 earnings report in a deteriorating technical position — down 12% over the past month and 9.5% on the week alone, with short sellers near their most aggressive stance in months.
The short interest story has not changed materially since the previous note, and that itself is the story. Short interest remains at 11.9% of the free float — up 40% over the past month, from roughly 8.4% at the end of April. Bears have not blinked despite the stock's slide. The ORTEX short score of 55 reflects a moderately pressured setup, little changed from recent days. What keeps the setup from tipping into extreme territory is the lending market. Borrow availability remains exceptionally wide at 787% of short interest, meaning nearly eight shares are available to lend for every one already borrowed. Cost to borrow is just 0.55%, barely above its recent floor. There is no squeeze pressure here — new shorts can enter freely, and existing ones face no forced unwind.
Options positioning has edged more defensive, but not dramatically so. The put/call ratio is running at 0.79, modestly above its 20-day average of 0.71, placing it roughly 0.7 standard deviations above recent norms. That is a mild lean toward protection — not the kind of alarmed hedging seen when the ratio approaches its 52-week high of 1.06. Peers are broadly weak: fell 6.8% Monday and dropped 6.3%, suggesting sector-wide pressure rather than Chewy-specific selling.
Analysts remain broadly bullish in rating but have spent the past two weeks cutting targets. JP Morgan trimmed to $35 from $40, and Mizuho lowered to $40 from $50, both within the last week — both maintaining positive ratings. Morgan Stanley and Barclays made similar moves the week before. The consensus mean target of $38.85 implies significant upside from $20.15, but the direction of travel is clearly downward. Bulls point to Autoship recurring revenue, the Modern Animal veterinary acquisition, and an 87th-percentile forward EPS growth rank. Bears focus on competition from Walmart and Amazon, supply-chain exposure, and a stock that has now retraced most of its March post-earnings surge — when the stock jumped 15% in a single session on the prior quarterly print.
That March reaction is the benchmark the June print will be measured against — whether Chewy can again surprise on the metrics that matter, or whether the steady drumbeat of analyst target cuts and rising short interest reflects something more fundamental about the competitive trajectory.
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