Chewy’s Bold Push into Vet Clinics Could Unlock a $40 Billion Market, Says Morgan Stanley

Chewy Inc. (NYSE:CHWY) has emerged as Morgan Stanley’s top pick to capitalize on the U.S. veterinary clinic boom, as the investment bank estimates the market is worth approximately $40 billion in total addressable opportunity.

In a new report, analysts at Morgan Stanley launched a detailed model projecting Chewy’s clinic expansion strategy. They estimate that every 100 clinics could generate $50 million in EBITDA, creating $500 million to $800 million in enterprise value (EV) — even before accounting for broader branding and customer acquisition benefits.

Why Chewy?

Morgan Stanley's confidence in Chewy’s competitive edge is grounded in a few key drivers:

• Strong brand loyalty among pet owners

• Over $3 billion in existing pet health sales, including the largest U.S. pet pharmacy

• Large, data-rich customer base with millions of recurring orders

• A growing affinity among millennials and Gen Z pet owners, 80% of whom say they would consider Chewy-run vet clinics

Clinic-Level Economics

Here’s what the numbers look like per clinic, according to Morgan Stanley:

Metric

Per Clinic Estimate

Annual Revenue

~$2.4 million

EBITDA at Maturity

~$500,000

Enterprise Value (EV) Impact

$5M – $8M

Capital Investment

~$1.5M – $2.0M

Expected ROI

~2.5x – 5x

Morgan Stanley models a base case where Chewy opens 100 clinics by 2030, yielding:

• $290 million in revenue

• $47 million in EBITDA

In its bull case, Chewy scales to 275 clinics, generating:

• $842 million in revenue

• $126 million in EBITDA

In line with these projections, Morgan Stanley raised its bull-case price target for Chewy from $68 to $75 per share.

Real-Time Fundamentals & Valuation Metrics

Track Chewy’s financial growth and valuation multiples using the Company Key Metrics (TTM) API. This data helps investors monitor:

• EBITDA margins

• Free cash flow

• Revenue per user

• Return on invested capital (ROIC)

For a more holistic picture of Chewy’s fundamentals, access the Full Financials As Reported API to analyze quarterly and annual income statements, balance sheets, and cash flow data.

Conclusion

Chewy’s venture into veterinary care is more than just a diversification play—it could be a high-margin, scalable driver of long-term shareholder value. With strong unit economics, brand trust, and data-driven insights, Chewy is positioning itself to become a dominant player in a fragmented and lucrative industry.

Will vet clinics become the next billion-dollar vertical for Chewy? The numbers—and investor sentiment—are starting to say yes.