Wayfair (W) AI Stock Analysis

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Wayfair

(NYSE:W)

Rating:44Neutral

Price Target:

$46.00

▼(-6.33%Downside)

Wayfair's overall stock score reflects significant financial challenges, including declining revenues, persistent losses, and a highly leveraged balance sheet. While technical analysis shows some bullish momentum, overbought conditions suggest caution. The lack of earnings and a negative P/E ratio further contribute to the low score. Despite strategic improvements noted in the earnings call, substantial risks remain.

Positive Factors

Financial Performance

Wayfair reported solid Q1 results relative to expectations, with total revenue and profitability coming in ahead of consensus.

Market Share

Wayfair has been adding to its market share over the past few quarters, though picking up on an acceleration.

Negative Factors

Leadership Changes

Perigold's Chief Marketing Officer has departed, which may impact the leadership in the short term.

Revenue Guidance

The second-quarter outlook lacked revenue details, which could be challenged as tariff headwinds increase.

Wayfair (W) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$6.21B

Dividend YieldN/A

Average Volume (3M)4.89M

Price to Earnings (P/E)―

Beta (1Y)2.64

Revenue Growth-0.89%

EPS Growth46.62%

CountryUS

Employees12,100

SectorConsumer Cyclical

Sector Strength58

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.10

Shares Outstanding103,657,180

10 Day Avg. Volume4,252,185

30 Day Avg. Volume4,886,970

Financial Highlights & Ratios

PEG Ratio>-0.01

Price to Book (P/B)-1.37

Price to Sales (P/S)0.00

P/FCF Ratio-3.08

Enterprise Value/Market Cap1.62

Enterprise Value/Revenue0.21

Enterprise Value/Gross Profit2.87

Enterprise Value/Ebitda-24.28

Forecast

1Y Price Target

$43.84

Price Target Upside-10.73% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering28

Wayfair Business Overview & Revenue Model

Company DescriptionWayfair Inc. engages in the e-commerce business in the United States and internationally. The company provides approximately thirty-three million products for the home sector under various brands. It offers online selections of furniture, décor, housewares, and home improvement products through its sites, including Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold brands. The company was founded in 2002 and is headquartered in Boston, Massachusetts.

How the Company Makes MoneyWayfair generates revenue primarily through the sale of home goods and furnishings via its e-commerce platform. The company's key revenue streams include direct sales, where Wayfair purchases products from suppliers and sells them to consumers, and a marketplace model, where third-party sellers list their products on Wayfair's platform and Wayfair earns a commission on each sale. Wayfair also invests in advertising and brand partnerships to drive traffic and sales, leveraging its logistics network to offer delivery and installation services that enhance customer satisfaction and retention. Additionally, Wayfair's data-driven approach enables personalized marketing and inventory management, further contributing to its earnings.

Wayfair Key Performance Indicators (KPIs)

Any

Active Customers

Active Customers
Counts the number of unique customers who have made a purchase over a specific period, reflecting the company’s market reach and customer retention success.

Chart InsightsWayfair's active customer base has been declining since its peak in early 2021, reflecting challenges in maintaining growth post-pandemic. Despite strategic growth in the U.S. market and improvements in supplier advertising, the company faces flat revenue growth and negative free cash flow. The exit from the German market has further pressured international revenue. Wayfair's focus on cost efficiency and a strong financial position may help navigate these challenges, but the declining customer trend underscores the need for revitalized customer acquisition strategies.

Data provided by:

Main Street Data

Wayfair Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 62.83%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Wayfair's strategic growth in the U.S. market, significant improvements in supplier advertising and cost efficiency, and a solid financial position. However, challenges remain with flat revenue growth, negative free cash flow, and temporary margin pressures from CastleGate. The company's strategic initiatives and strong financial footing suggest resilience in navigating current market conditions.

Q1-2025 Updates

Positive Updates

U.S. Business Growth Amidst Market Contraction

Year-over-year growth, excluding Germany, came in positively at 1%, driven by the U.S. business up 1.6% against a contracting market.

Supplier Advertising Business Expansion

Supplier advertising business grew by more than 50% in 2024 to over 150 basis points of revenue penetration, with a roadmap to reach 300 to 400 basis points.

Strong Financial Position

Wayfair issued a $700 million high-yield bond and refinanced its revolving credit facility, reducing 2025 and 2026 maturities and maintaining a healthy cash position with $1.4 billion in cash and $1.8 billion in total liquidity.

Significant Cost Efficiency Improvements

SOTG&A expenses were down by $50 million compared to the previous year, reflecting the company's cost efficiency efforts.

Positive Adjusted EBITDA

Generated $106 million of adjusted EBITDA in the first quarter, with a 3.9% margin on net revenue.

Negative Updates

Flat Revenue Growth

Net revenue was flat year over year, with a 10.9% decline in the international segment due to the exit of the German business.

Negative Free Cash Flow

Free cash flow was negative $139 million for Q1, although it was an improvement of nearly $60 million compared to the first quarter of 2024.

CastleGate Margin Pressure

Temporary impact on gross margin due to accelerated inventory imports by suppliers leaning into CastleGate, increasing upfront costs.

Company Guidance

During the Wayfair First Quarter 2025 Earnings Release and Conference Call, the company provided guidance for the second quarter of 2025, indicating an expected gross margin range of 30% to 31%, customer service and merchant fees just below 4%, and advertising expenses between 12% and 13%. Selling, operations, technology, general, and administrative expenses are projected to be between $360 million and $370 million. With an assumption of flat net revenue year-over-year, Wayfair anticipates an adjusted EBITDA margin of 4% to 5%. The company also expects equity-based compensation and related taxes of approximately $70 million to $90 million, depreciation and amortization of $75 million to $80 million, net interest expense of around $30 million, and capital expenditures in the range of $60 million to $70 million.

Wayfair Financial Statement Overview

Summary

Wayfair faces significant financial challenges, with declining revenues, persistent losses, and a highly leveraged balance sheet with negative equity. While cash flow has shown some improvement, significant risks remain due to operational inefficiencies and financial instability.

Income Statement

Neutral

The revenue has been declining over the years with a TTM revenue of $11.85 billion, down from $14.15 billion in 2020. Gross profit margin is around 29.5% in TTM, but the company remains unprofitable with a net loss of $357 million. EBIT and EBITDA margins are negative, indicating operational challenges.

Balance Sheet

Negative

The company has negative stockholders' equity, which is a red flag. The debt-to-equity ratio cannot be calculated due to negative equity, but total debt exceeds total assets. The equity ratio is negative, indicating financial instability and high leverage.

Cash Flow

Neutral

Free cash flow has improved to $175 million in TTM from a negative $2 million in 2023, indicating better cash management. Operating cash flow covers net income losses, but cash flow from operations is relatively weak compared to historical performance.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
11.85B	11.85B	12.00B	12.22B	13.71B	14.15B
	Gross Profit
3.49B	3.57B	3.67B	3.42B	3.90B	4.11B
	EBIT
-347.00M	-461.00M	-813.00M	-1.31B	-86.00M	360.35M
	EBITDA
-53.00M	-461.00M	-295.00M	-921.00M	224.00M	637.43M
	Net Income Common Stockholders
-357.00M	-492.00M	-738.00M	-1.33B	-131.00M	185.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.37B	1.37B	1.35B	1.28B	2.40B	2.59B
	Total Assets
3.42B	3.46B	3.47B	3.58B	4.57B	4.57B
	Total Debt
3.91B	4.22B	4.20B	4.16B	3.94B	3.53B
	Net Debt
2.58B	2.90B	2.88B	3.10B	2.24B	1.40B
	Total Liabilities
6.23B	6.21B	6.18B	6.13B	6.19B	5.76B
	Stockholders Equity
-2.81B	-2.75B	-2.71B	-2.55B	-1.62B	-1.19B
Cash Flow		Free Cash Flow
175.00M	83.00M	-2.00M	-1.13B	130.00M	1.08B
	Operating Cash Flow
360.00M	317.00M	349.00M	-674.00M	410.00M	1.42B
	Investing Cash Flow
-204.00M	-262.00M	-152.00M	1.00M	-515.00M	-236.07M
	Financing Cash Flow
71.00M	-69.00M	77.00M	16.00M	-303.00M	352.59M

Wayfair Technical Analysis

Technical Analysis Sentiment

Positive

Last Price49.11

Price Trends

50DMA

35.92

Positive

100DMA

37.70

Positive

200DMA

42.42

Positive

Market Momentum

MACD

3.35

Negative

RSI

69.90

Neutral

STOCH

70.63

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For W, the sentiment is Positive. The current price of 49.11 is above the 20-day moving average (MA) of 43.34, above the 50-day MA of 35.92, and above the 200-day MA of 42.42, indicating a bullish trend. The MACD of 3.35 indicates Negative momentum. The RSI at 69.90 is Neutral, neither overbought nor oversold. The STOCH value of 70.63 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for W.

Wayfair Risk Analysis

Wayfair disclosed 49 risk factors in its most recent earnings report. Wayfair reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Wayfair Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBAY	77 Outperform	$35.82B	18.57	36.48%	1.49%	2.04%	-15.61%
WSM	75 Outperform	$19.45B	17.90	51.10%	1.67%	1.64%	8.57%
CHWY	75 Outperform	$17.30B	46.49	76.24%	―	7.64%	369.79%
ETSY	68 Neutral	$5.62B	38.74	-39.97%	―	2.18%	-32.87%
Sector *	62 Neutral	$6.86B	11.07	2.77%	4.27%	2.66%	-24.95%
RH	55 Neutral	$3.55B	43.43	-38.18%	―	8.31%	14.65%
W	44 Neutral	$6.21B	―	17.86%	―	-0.89%	46.62%

* Consumer Cyclical Sector Average

Performance Comparison

Wayfair

48.29

-4.01

-7.67%

EBAY

eBay

77.53

24.62

46.53%

WSM

Williams-Sonoma

156.93

7.30

4.88%

182.69

-35.14

-16.13%

ETSY

Etsy

55.30

-2.90

-4.98%

CHWY

Chewy

41.51

16.01

62.78%

Wayfair Corporate Events

Executive/Board ChangesShareholder Meetings

Wayfair Elects Directors at Annual Stockholders Meeting

Neutral

May 22, 2025

On May 20, 2025, Wayfair Inc. held its 2025 Annual Meeting of Stockholders where all eight nominees for director were elected, and PricewaterhouseCoopers LLP was ratified as the independent registered public accounting firm for fiscal 2025. These decisions are expected to influence Wayfair’s governance and financial oversight, potentially impacting its strategic direction and stakeholder confidence.

The most recent analyst rating on (W) stock is a Buy with a $60.00 price target. To see the full list of analyst forecasts on Wayfair stock, see the W Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.