E-commerce company Wayfair (NYSE:W) rallied in pre-market trading after announcing that it would reduce its workforce by 13%. This layoff will likely impact 1,650 employees or 19% of its corporate team. Wayfair expects cost savings of over $280 million due to these layoffs.
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The company has projected these cost savings to substantially boost its profitability and now expects an Adjusted EBITDA of $600 million in 2024. Wayfair expects to incur employee severance and benefit costs of between $70 million and $80 million, most of which are likely to be expensed in the first quarter of this year. These expenses exclude non-cash charges associated with equity-based compensation.
Is Wayfair Stock a Good Buy?
Analysts remain cautiously optimistic about Wayfair stock with a Moderate Buy consensus rating based on 17 Buys and nine Holds. Over the past year, Wayfair stock has gone up by 25%, and the average W price target of $68.56 implies an upside potential of 34.7% at current levels.
