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Shares of the pet supplies retailer finished its first day on the public market about $1 short of its $36 opening trade. The stock gained nearly 60% from its $22 IPO price.
"Even after today's magnificent run, Chewy isn't all that expensive. The company's got a great growth story and they have legions of loyal customers," Cramer said.
Chewy recorded 45% revenue growth during the first quarter, a slower rate than the 68% growth it posted the year prior. The company has yet to turn a profit, but it has been investing and improving its margins, Cramer said.
With a market capitalization of $14 billion, the stock is trading at 3.9-times 2018 sales. If the company grows just 35% in 2019, it would sell for 2.9-times next year's sales estimates.
"That actually strikes me as a pretty reasonable valuation, which means the underwriters really low-balled this deal," the "Mad Money" host said.
Chewy was founded in 2011 to raise money for animal shelters. The site's annual sales have grown from $26 million in 2012 to $3.5 billion in 2018, Cramer said. A super majority of its sales come from automatic orders, he added.
Pet owners are spending more and more on food and health care for their dogs and cats. On top of that, the pet supply industry is well over a decade behind in adapting to online shopping habits, Cramer said. Chewy has seven fulfillment center and offers two-day shipping to customers in most parts of the country, he added.
"Chewy expects that online penetration will reach 25% by 2022, and you know what, I think that actually may be a conservative forecast," Cramer said. "Chewy has got it all figured out, though. They're like the Amazon of pets — fitting, the CEO comes from Amazon, he was a big executive there — with a broad selection of high-quality products at competitive prices. "
PetSmart owns a controlling stake in Chewy. Because PetSmart's balance sheet is in poor shape, Cramer said he cannot recommend Chewy at this price. But he would be a buyer if shares slip to $30 a piece. At that price, the stock would trade roughly at 2.5-times sales estimates.
"I hate to chase, which is why I think you should wait for Chewy to pull back, say, to $30 before you pull the trigger," Cramer said. "That said, I can understand why any satisfied Chewy customer might want to put some away right here right now because they love the company that much."
WATCH: Cramer breaks down the Chewy IPO