In an interview with Cheddar TV, IPO Edge Editor-in-Chief John Jannarone lays out the bull case for online pet supply heavyweight Chewy, which begins trading Friday after pricing at $22 a share Thursday night. The company and Amazon have roughly equal market share but Chewy is likely to take the lead thanks to its emphasis on customer service that’s critical for animal owners. The price implies an enterprise value of about 1.5 times forward sales, similar to other e-commerce companies like Wayfair and Stitch Fix, but Chewy faces fewer competitors and enjoys very strong repeat business. What’s more, some two thirds of the company’s revenue comes from auto payments – largely customers whose dogs and cats eat the same food every month.
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