Wayfair’s (NYSE:W) Strategy Reset Begins to Boost Its Fortunes
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Wayfair’s (NYSE:W) Strategy Reset Begins to Boost Its Fortunes

Story Highlights

Wayfair managed to substantially narrow its net loss in Q1. The online furniture seller is gearing up to open its first large-format physical store this month.

The post-pandemic years have necessitated a strategy reset for several darlings of the lockdown era. For online furniture retailer Wayfair (NYSE:W), consumers’ return to brick-and-mortar formats after the COVID-19 pandemic resulted in net losses, slowing revenues, and a gargantuan 79% drop in its share price over the past three years. However, the company’s promising first-quarter results this week and strategy reset could signal a boost in its fortunes in the coming periods.

Wayfair’s Q1 Beat Expectations

Wayfair’s stock price shot up by 16% yesterday after its Q1 revenue of $2.7 billion came in better than expectations despite a 1.6% year-over-year drop. The furniture seller’s net loss per share of $0.32 also came in narrower than its net loss per share of $1.13 a year ago.

While the company witnessed a drop in its top line in the U.S. and its international markets, its active customers increased by 2.8% to 22.3 million. The somewhat improved performance comes amid Wayfair’s drive to lower costs and another round of layoffs earlier this year.

Wayfair’s Effort to Boost Performance

Additionally, the company is banking on a brick-and-mortar presence to boost its performance. Wayfair already operates multiple physical stores and is gearing up to open its first large-format store this month.

However, the current macroeconomic picture is far from promising amid tepid consumer demand and elevated interest rates. Consequently, it could be a while before the company completely turns its fortunes around. But it seems to be laying the right groundwork towards such a scenario.

What Is the Target Price for W Stock?

Overall, the Street has a Moderate Buy consensus rating on Wayfair. Furthermore, the average W price target of $65.92 implies a 12.4% potential upside in the stock.

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