Short squeezes can be exciting, but it’s important to learn about Chewy (NYSE:CHWY) as a business before considering a share position. So, after conducting your due diligence, you’ll hopefully find some compelling, fundamental-based reasons to buy Chewy stock.

Chewy, an online pet product retailer, is a busy company with promising growth. These considerations may be overlooked amidst meme-stock rallies. Investors should carefully consider Chewy as a business, not just as a short-squeeze target, before taking a position.

Chewy Stock and Roaring Kitty’s Summertime Return

The summer of 2024 will be known for many things. Among them is the return to social media of meme lord Keith Gill, also known as Roaring Kitty.

Undoubtedly, some of the company’s investors were delighted to discover that Gill had a share stake in Chewy.

Earlier this summer, a filing indicated that Gill owned 9,001,000 Chewy stock shares, which equated to a 6.6% stake in the company.

This is notable, but it shouldn’t be your primary reason to invest in Chewy. On the day when Gill disclosed his large Chewy stake, the share price finished the trading session down 6.6%.

In other words, even if Gill gets rich from all of this publicity, it doesn’t necessarily mean his followers will get rich.

At the end of the day, there’s no guarantee of a Chewy stock short squeeze. Moreover, it’s better to think for yourself than to follow meme-stock celebrities in hopes of quick gains.

Chewy: Some Positive Facts to Chew On

To help you conduct your due diligence, I’ll point out some positive facts about Chewy. First of all, Chewy agreed to repurchase 17,550,000 of the company’s common-stock shares from Buddy Chester Sub LLC.

That’s good news because the “repurchased shares will be canceled and retired upon completion of the Repurchase.” Separately, the company’s board of directors approved a $500 million share-repurchase program.

Consequently, Chewy can reduce the supply of Chewy shares, which could make each share more valuable in the long run.

Moving beyond the buybacks, Chewy is a revenue grower, albeit not a spectacular one. Specifically, the company’s net sales increased 3.1% year over year to $2.88 billion in fiscal 2024’s first quarter.

Here’s my favorite statistic, though. In Q1 of FY2024, Chewy reported adjusted diluted earnings of 31 cents per share, versus 20 cents the year-earlier quarter.

In percentage terms, that’s earnings growth of 55% year over year – not too shabby, you must admit.

Chewy Stock: Choose Facts Over Fanfare

It’s easy to get caught up in the excitement over meme-stock gurus and short-squeeze fantasies. Mature investors, however, should focus on Chewy’s fundamental facts as a business enterprise.

As it turns out, Chewy is a sales and earnings grower that evidently likes to buy back its own stock shares.

With that in mind – and without obsessing over summertime short-squeeze chatter – feel free to pick up a few shares of Chewy stock.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

On the date of publication, the responsible editor did not have (either directly or indirectly) and positions in the securities mentioned in this article.