3 Reasons Chewy Stock Fits Peter Lynch's Blueprint for a 10-Bagger Stock

Chewy is building an ecosystem from a "boring" business that investors have long ignored.

The company has grown under a variety of conditions, and annual profit growth now exceeds 20%.

Chewy's comparatively small size leaves considerable room for growth in the company and stock price.

Peter Lynch was one of the most successful investors in his day. Between 1977 and 1990, his Magellan fund achieved a 29.2% average annual return.

Much of that success came from his formula of picking 10-bagger stocks, or stocks that could turn a $1,000 into $10,000 over time. Many of these successes occurred in retail stocks , as Lynch picked winners such as Dunkin' and Taco Bell before Yum! Brands acquired it.

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Naturally, today's investors want to apply his criteria to find future 10-baggers. Given Lynch's success with finding promising retail stocks, Chewy (NYSE: CHWY) may be another name that fits into Lynch's criteria. Here are three reasons to explain why.

Chewy is a name that grew into a potential Peter Lynch stock. One way is by being "boring." E-commerce names were more exciting during the COVID-19 pandemic, but with the return of online shopping, such enterprises did not appear as appealing as Amazon .