Some stocks are mispriced because their fundamentals are deteriorating, and investors are slow to recognize it. Then there are stocks the market misprices because investors use the wrong label, stop thinking and move on. Chewy may fall into the second category. Many investors likely view Chewy as an online pet retailer with low margins, high competition and strong consumer sensitivity. A few of us have been around long enough to remember Pets.com and might wonder if this is just a modern version of that. But that framing misses what is actually interesting about the business. Chewy is not just selling pet products online. It has built a recurring, habit-based consumer platform in a category where the spending is more durable than many investors seem willing to recognize. Just over a week ago, geopolitical angst started boiling as the U.S. and Israel struck Iran. Since then, consumers have faced revised job numbers (worse than previously reported), higher fuel costs, and worries about conflagration in a region with a history of drawing us into long, unpopular, and often ineffective conflicts. The combination of these factors might cause investors to reduce exposure to consumer discretionary stocks. I wrote only a couple of days ago about Kenvue/Kimberly Clark as a defensive bet in this environment. Retail gets hit. E-commerce gets discounted. Anything tied to discretionary household spending is treated as equally vulnerable. But pet care is not the same as apparel, home furnishings, or many other discretionary categories. A family may put off buying a new dining table. They may skip a weekend trip. They may even trade down in some categories. But they are far less likely to stop buying dog food, cat litter, medication, or basic pet health products. Chewy’s is officially in the consumer discretionary sector, but as a pet owner (I’ve included a picture of our dog Sophie, aka “the Furry Fluffnut”),, the things we buy her hardly feel discretionary; they’re as basic as toothpaste and toilet paper. Meanwhile, gas prices are pretty eye-watering. I filled the tank yesterday at ~$5.30/gallon (we live in California; unbelievably, that’s actually below the state average of $5.46/gallon for premium as I write this). For people like me, Chewy’s Autoship business is not just a convenience feature. It’s a buffer from rising fuel costs, and once a customer has regular deliveries set up for food, treats, supplements, or prescriptions, the relationship becomes much more valuable. That customer is no longer making a fresh buying decision every time. Chewy has become part of the routine. Habitual purchasing behavior is one of the best things a company can have because it tends to lead to better retention, greater visibility, and a more stable revenue base. More stable revenues warrant a higher multiple than the market typically assigns to a plain-vanilla retailer, yet Chewy trades at 16.5x forward-adjusted EPS estimates, with a free cash flow yield of nearly 6.7%. Chewy is expected to grow revenues by more than 8%, considerably higher than the topline growth the S & P 500 has averaged over the past couple of decades, yet it is trading at a ~25% discount to the market’s forward multiple. There would be little reason not to own the stock, but for two issues. The first is the chart: the technicals are pretty grim. Chewy is down 23% year to date and more than 78.5% from its all-time high in mid February 2021. The second is earnings, the company is slated to report Q4 ’26 (Fiscal Year ended January 31st, 2026) on March 25, and implied volatility is high. An investor might be thinking, “why not wait until after the results for a bit more clarity on operating results?” That’s fair, and of course, one can sit tight for two more weeks. But for those who think earnings might be the catalyst to get things going, the high options premiums offer some fairly attractive breakpoints for spreads such as butterflies, condors and bullish call spread risk reversal such as the June 20/27.5/32.5 example provided here. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, or its parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.