According to the Futu Securities News App, after Roaring Kitty dramatically acquired 6.6% of Chewy's (CHWY.US) shares, investment bank Evercore ISI conducted its fourth annual US pet survey of this online pet supply retailer and maintained a neutral rating on the company with a target price of $22.

The survey collected opinions from over 600 pet owners and Chewy customers, revealing a sustained increase in online pet supply purchases, with 85% of respondents stating that they purchased pet supplies online, reaching a historical high. Chewy also performed excellently in customer satisfaction, with 87% of respondents stating that they were very satisfied with the company.

However, the survey also pointed out the challenges Chewy is facing: the percentage of consumers who choose Chewy as their destination for online pet supply shopping has dropped significantly, from 64% in 2022 to 52%, a change that shows Chewy is facing fierce competition from all channels and value websites such as Walmart (WMT.US) and PetSmart.

These survey results reflect the rapid evolution of the online pet retail market. Although Chewy has maintained a high level of customer satisfaction, changes in consumer shopping preferences could affect its market position. The competition from well-known retailers with strong omnichannel capabilities seems to be a key factor in consumer behavioral changes.

Chewy is known for its rich variety of pet products and services, occupying an important position in the online pet retail field. The company's focus on customer experience and satisfaction has always been at the core of its business model. However, faced with market dynamics changes, Chewy needs to develop a new strategy to continue to attract and retain customers in the fiercely competitive online environment.

Recently, Chewy's business operations have made significant progress. In particular, Keith Gill (also known as Roaring Kitty) disclosed his ownership of 6.6% of Chewy's shares, which sparked investors' interest and highlighted Gill's influence in the market.

According to holdings information disclosed on the official website of the US Securities and Exchange Commission (SEC), Roaring Kitty owns approximately 9 million shares of Chewy's Class A stocks, with a total value of approximately $245 million at last Friday's closing price. Last week, Gill posted a cartoon image featuring a dog on social media X, which caused a brief surge in Chewy's and Petco Health and Wellness's (WOOF.US) stock prices. Data shows that Chewy's stock price has risen by about 70% since early May, but is still down 79% from its 2021 peak.

It is worth mentioning that Gill, who once led the "retail investor war on Wall Street" and pushed up the stock price of GameStop (GME.US), returned to social media platforms in May and sparked a rally in a group of Meme stocks, including GameStop. GameStop quickly took advantage of this by raising more than $3 billion by issuing stocks on the market. However, Gill was sued in federal court in Brooklyn last Friday, on charges of planning a "pump and dump" scheme involving GameStop's stock.

At the same time, the market's short interest in Chewy is also on the rise, which is not uncommon among Meme stocks, including GameStop. More notably, there is another connection between GameStop and Chewy. Ryan Cohen, GameStop's CEO, was also Chewy's founder and CEO. In 2017, he led PetSmart's acquisition of Chewy, and in 2019, he pushed for Chewy's IPO.

Chewy also took a strategic share buyback initiative, planning to repurchase 17,550,000 Class A common stocks, demonstrating the company's confidence in its growth strategy and profit margin expansion. The repurchase is part of Chewy's capital allocation strategy and is expected to be completed by June 27, 2024.

In terms of analyst ratings, Jefferies raised Chewy's target price to $31 and maintained a "buy" rating. Barclays reiterated its "hold" rating with a target price of $32. Nomura Securities also raised Chewy's target price to $20, considering the company's share buyback plan.

In terms of financial performance, Chewy performed strongly in the first quarter of 2024, with Autoship sales growing, and gross margin and EBITDA profit margin reaching historic highs. Although the number of active customers has slightly decreased, Chewy expects its second-quarter revenue to meet Wall Street's expectations. The company also reiterated its full-year 2024 revenue guidance and raised its 2024 fiscal year EBITDA profit margin guidance midpoint from 3.8% to 4.2%.

Evercore analyst Mark Mahaney also stated: "Despite the softness of the entire industry, we still believe Chewy is a stable company with many investment highlights, including the continuous growth of spending and loyalty of each customer, advertising sponsorship, international expansion, growth opportunities in vertical fields (such as veterinary clinics), and the potential for continuous improvement in gross margin and EBITDA profit margin."

After experiencing a series of fluctuations related to Gill, Chewy's stock price fell slightly by 0.30% in pre-market trading on Tuesday. After experiencing a period of intense volatility, Chewy's stock price has risen by nearly 15% in the past six weeks. Currently, Chewy's short position accounts for 14.9% of its total outstanding shares, showing a divergence in market prospects.