Key Points
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Chewy is expanding its ecosystem into physical veterinary clinics following its acquisition of Modern Animal.
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Coupang maintains a dominant logistics network in South Korea while successfully scaling its presence in Taiwan.
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Which retail stock is the better addition to your portfolio in 2026?
- 10 stocks we like better than Chewy ›
Choosing between a specialized pet care leader and a dominant multi-category logistics giant involves weighing niche loyalty against regional scale. Should you favor Chewy Inc (NYSE:CHWY) or Coupang Inc (NYSE:CPNG) right now?
Chewy focuses on the resilient pet care market in North America through its subscription-based model. Coupang dominates South Korean e-commerce with its integrated delivery network and expanding presence in Taiwan. Both companies represent unique opportunities within their respective markets, though they operate with very different geographic and category concentrations.
The case for Chewy
Chewy serves as a primary destination for pet parents, offering approximately 190,000 products through its digital platform and mobile apps. The company is a prominent player among retail stocks, specializing in everything from premium food to prescription medications. Following the acquisition of Modern Animal in April 2026, the company plans to grow its physical clinic network to 47 locations to deepen customer loyalty.
In its latest annual report for FY 2025, revenue reached about $12.6 billion, representing a growth rate of approximately 6% compared to the previous year. The company reported net income of approximately $222.8 million for the period, resulting in a net margin of roughly 2%. This performance reflects a continued focus on capturing a larger share of the resilient pet care market while managing costs.
As of its February 2026 balance sheet, the company maintains a debt-to-equity ratio of 1.1x, which compares total debt to the equity held by shareholders. The so-called current ratio stands at approximately 0.9x, measuring the ability to cover short-term liabilities with assets that can be converted to cash quickly. Note that stock-based compensation represented roughly 43% of operating cash flow, which inflates reported cash generation since stock-based compensation is a non-cash expense added back in the cash flow statement.
The case for Coupang
Coupang operates a massive logistics and e-commerce infrastructure primarily serving millions of customers in South Korea and Taiwan. The company provides a wide range of services, including Rocket Delivery for rapid shipments, Coupang Eats for food delivery, and luxury goods via the Farfetch platform. Through its logistics partnership with J.Q. Dickinson Salt-Works, it is also expanding the variety of niche consumer goods it brings into Asian markets.
In its latest annual report filed for FY 2025, revenue reached approximately $34.5 billion, which was an increase of around 14% over the prior year. The company reported net income of roughly $208 million, yielding a net margin of 0.6% as it continues to reinvest in its fulfillment network. This growth was supported by an active customer base that reached some 25 million people in the second quarter of 2026.
As of its December 2025 balance sheet, the company has a debt-to-equity ratio of 1.0x and a current ratio of 1.0x. Free cash flow for the fiscal year was approximately $522 million, which is calculated as cash from operations minus capital expenditures. Note that stock-based compensation (SBC) represented roughly 27% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Chewy faces intense competition from online retailers and local veterinarians who may discourage pet owners from using third-party pharmacies. The company also deals with regulatory scrutiny in California regarding antitrust matters and ongoing litigation that could divert management resources. Finally, reliance on third-party shipping partners means any logistics disruption could immediately hurt customer satisfaction and financial results.
Coupang operates under significant regulatory pressure in Korea, including investigations into marketplace practices and potential fines related to data security. A 2025 data incident involving 33 million customer accounts has led to class action litigation and mandatory compensation programs that impact revenue. Additionally, the company relies heavily on Amazon.com Inc (NASDAQ:AMZN) for cloud infrastructure, making it vulnerable to service failures or price increases from this provider.
Valuation comparison
Chewy currently presents a lower Forward P/E than Coupang, although both stocks are priced at an identical P/S ratio.
MetricChewyCoupangForward P/E16.3×75.8xP/S ratio0.8×0.8x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Coupang is the dominant retail platform in its primary market of Korea and it has made great inroads into Taiwan. But a fire at a distribution center and a data breach have made for a tough 2026 for Coupang, with an indication that some consumers who abandoned the platform have yet to return, creating a drag on results. Yet membership in its WOW program has recently reached all-time highs, suggesting the company could start to post improving results in the next few quarters.
Wall Street sees Coupang swinging to a net loss for fiscal 2026, but rebounding in 2027 to post much healthier net income and sales. Forward numbers tend to be speculative, but it’s a good long-term sign. Coupang’s low P/S ratio gives some justification here for the business as a value play.
Chewy, meanwhile, is establishing a steady growth pattern. In its most recently reported quarter, management noted that its Autoship program grew faster than overall sales, implying that many customers’ standing orders will continue to provide a solid base for the company. The company also believes that in the long run, veterinarian and general pet health services are a huge untapped market for Chewy. The business recently closed on the acquisition of Modern Animal, which delivers high profitability per location and is a strong complement to Chewy’s existing business.
For fiscal 2026, sales are seen rising 7% to $13.5 billion, with net income up neatrly 50% to $333 million, according to consensus analyst estimates.
With its much more reasonable forward P/E ratio, as well as a market serving dedicated pet owners, Chewy is the stock to buy in 2026, even as Coupang offers long-term promise.
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Brendan Coffey has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Chewy. The Motley Fool recommends Coupang. The Motley Fool has a disclosure policy.