Amazon is a better long-term investment compared to Chewy in the e-commerce market

From Nasdaq: 2024-10-02 05:15:00

Amazon (NASDAQ: AMZN) and Chewy (NYSE: CHWY) offer different investment opportunities in e-commerce. Amazon is the world’s largest e-commerce company, while Chewy operates a smaller pet product online marketplace. Amazon’s stock has rallied 118% in the past five years, while Chewy trades below its all-time high after rising 36% from its IPO price.

Amazon’s more diversified business model includes retail operations in 22 countries, Amazon Web Services (AWS), and Prime memberships. Chewy operates primarily in the U.S. and has expanded into Canada, focusing on pet products and Autoship subscriptions. Chewy faces competition from giants like Walmart and its former parent PetSmart.

Despite Chewy’s slightly faster net sales growth compared to Amazon, its growth has decelerated in recent years. Chewy aims to boost revenue per customer through subscriptions, insurance plans, and ads. Amazon rebounded in 2023 with 12% net sales growth and analysts project further growth, driven by international expansion and AI developments for AWS.

While Amazon’s stock appears pricier than Chewy’s based on GAAP earnings, Amazon’s larger, faster-growing, and more diversified business makes it a better long-term investment. The Motley Fool Stock Advisor team has identified 10 stocks for potential high returns, with Amazon not being one of them. Consider the historical success of their recommendations before investing in Amazon.

John Mackey, former Whole Foods Market CEO, an Amazon subsidiary, is on The Motley Fool’s board. The Fool has positions in Amazon, Chewy, and Walmart. The views expressed are solely the author’s and do not reflect Nasdaq’s opinions.



Read more at Nasdaq: Best Stock to Buy Right Now: Amazon vs. Chewy