A team at Bank of America Research led by senior analyst Curtis Nagle looked at the online retailer’s plans, and found it’s morphing into another kind of company altogether. Chewy has already grown far beyond its origins as the brainchild of GameStop CEO Ryan Cohen, the one-time meme-stock celebrity. From its start as an online pet-food retailer, it’s grown into a public company with a $16 billion market cap and a customer base of more than 20 million. (Cohen sold Chewy for $3.35 billion in 2017.)

Along the way, Chewy has also become the largest online pet pharmacy in the U.S., with $1.1 billion in annual sales and a 7% market share. However, Nagle’s team estimates only about a quarter of Chewy’s customers use these pharmacy services, leaving significant room for growth. If penetration rises to 40%, they said, Chewy could unlock an additional $750 million in sales, especially as pets age and require more medications.

The ASPCA estimates Americans adopted 23 million pets during the pandemic, and BofA notes these animals are now reaching middle age, fueling demand for more frequent vet visits, medications, and specialized care. The bank sees the pet-health sector growing 4% annually, with a likely acceleration in 2026 and 2027 as the “COVID cohort” of pets ages.

BofA Research

Chewy’s next act: from kibble to clinics

Chewy’s foray into veterinary clinics, branded as Chewy Vet Care (CVC), is off to a promising start, with the first 11 clinics averaging 4.8 out of 5 stars out of more than 1,000 reviews on Google. Customers praise the modern facilities, transparent pricing, and seamless integration with Chewy’s online ecosystem. Management characterized the early data to BofA Research as “promising,” saying the CVCs are exceeding expectations in engagement and acquiring new customers.

For example, one positive review simply states: “Always loved the company and now them having a vet is a win-win for Chewy.”

Negative reviews mention high prices and diagnosis issues. One customer said they’d “never paid such a high price for a wellness visit,” while another said the CVC gave them steroids instead of antibiotics.

BofA thinks Chewy can grow its vet hospitals rapidly. Looking at its books, with about one-third of capital expenditure dedicated to growth initiatives, BofA sees capacity to pick up the pace significantly. If Chewy dedicates 15% of its capex to vet clinics, BofA analysts estimate the CVCs could generate $335 million in revenue by 2030, with 20% EBITDA margins—adding 4% to Wall Street’s current EBITDA estimates.

Chewy has 17 fulfillment centers nationwide and says it can deliver to 80% of the population overnight and almost 100% in two days. It has fewer pharmacy fulfillment centers, but it still boasts a nationwide footprint, with room to expand.

BofA Research

According to the AVMA, the U.S. has more than 34,000 vet clinics and the space is fragmented. KMPG estimates roughly 30% of the nation’s vet clinics are owned by private-equity firms and 20% by corporations, with the remaining 50% mostly independent. Some of the largest players are Mars Veterinary Health, National Veterinary Associates, SVP & MVP, Thrive Pet Healthcare, and Petco, which range from over 2,000 locations in the U.S. to roughly 300. That means Chewy is just getting started.

Chewy’s expansion into vet care and pharmacy positions it to capture a growing share of the booming pet health market. As the company scales its clinics and deepens its pharmacy penetration, BofA estimates that it could add over $1 billion in new revenue. That’s a lot to chew on.

Chewy declined to comment.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.