Wayfair stock down 17% in the past month. Is it time to buy?
Wayfair, an e-commerce marketplace that sells furniture and household items, saw its stock drop nearly 17% over the past month (roughly 21 trading days), compared to the S&P 500 which was in increase of nearly 5% over the same period. It seems that several factors weigh on the title. First, there are fears that online spending on home furnishings is slowing, as demand fueled by Covid-19 cools as the economy opens up and people return to brick-and-mortar stores. This could impact Wayfair’s revenue growth rates. Additionally, retailers are also seeing significant supply chain issues and increased logistics costs with the reopening of Covid-19. This could have an impact on Wayfair, which sources much of its products from China. This could have an impact on the company’s margins in the coming quarters.
So is Wayfair stock on the verge of falling further or do the gains seem more likely? Based on our machine learning analysis of historical stock price trends, there is a 66% chance that the W share will rise in the next month (twenty-one trading days). See our analysis on Wayfair Stock Chance of Increase for more details.
Five days: W -7.2%, vs S&P 500 0.3%; Underperformed market
(15% probability of event)
- Wayfair stock decrease of -7.2% over a five-day trading period ending 10/27/2021, against the larger market (S & P500) which rose 0.3% over the same period.
- A change of -7.2% or more over five trading days has an event probability of 15%, which has occurred 275 times out of 1,775 in the past seven years.
Ten Days: W -2.3%, vs S&P 500 4.3%; Underperformed market
(37% probability of event)
- Wayfair stock -2.3% decrease over the last ten trading days (two weeks), compared to the larger market (S & P500) which rose 4.3%.
- A change of -2.3% or more over ten trading days has an event probability of 37%, which has occurred 659 times out of 1,770 in the past seven years.
Twenty-one days: W -17%, vs S&P 500 4.7%; Underperformed market
(10% probability of event)
- Wayfair stock decreased -17% over the last twenty-one trading days (roughly a month), compared to the larger market (S & P500) which rose 4.7%
- A change of -17% or more over twenty-one trading days has an event probability of 10%, which has occurred 178 times out of 1759 in the past seven years.
[8/10/2021] What’s going on with Wayfair Stock?
Wayfair, an e-commerce marketplace that sells furniture and household items, has seen its inventory rise nearly 15% over the past week (five trading days). This compares to the S&P 500 which only returned around 1% over the same period. The rally comes after the company posted a strong set of second quarter results as it continued to benefit from demand for home goods, despite the economy reopening following the Covid-19 lockdowns and more and more people returning to physical retail stores. There are a few other trends that make the stock worth looking for long-term investors as well. The US housing market remains strong, driven by demand for larger homes and suburban homes. Homeownership among younger people – who are more likely to shop online – has accelerated during the pandemic. Additionally, the trend of working from home is also expected to persist for some time, with the increase in Covid-19 cases in the United States in recent weeks potentially delaying the reopening of offices. All of this should bode well for Wayfair. Additionally, Wayfair’s valuation also remains attractive, in our view, with the stock trading at around 1.7x forward earnings, with sales likely to grow by around 12% according to consensus estimates. This compares to home improvement giant Lowe’s
See our theme of Ecommerce stocks which includes US-based ecommerce platform players, logistics and digital payment companies that stand to gain as shopping continues to move online
[4/20/2021] What’s going on with Wayfair Stock?
Wayfair, an e-commerce company that sells furniture and home goods, has become a big winner thanks to Covid-19, its inventory having increased more than 3 times in the past 12 months. However, the stock has moved widely sideways in recent months, trading at levels around $ 320 per share, as a faster-than-expected vaccine rollout and declining Covid-19 cases in the United States have harmed the narrative of actions “at home”. That said, we believe there are some favorable winds that are likely to pull the stock up in the short to medium term. First, it’s likely that a significant amount of the stimulus checks mailed out as part of the $ 1.9 trillion Covid-19 bailout will be spent on e-commerce spending, and companies like Wayfair will benefit. In addition, the US housing market is also very strong thanks to low interest rates and the demand for larger homes, which could also help home equipment players such as Wayfair. Homeownership among millennials – who are more likely to shop online – has also picked up during the pandemic. The millennial homeownership rate has climbed to 47.9%, from around 40% just three years ago.  Wayfair’s valuation also remains relatively attractive, with the stock trading at just 2x forward earnings, with sales likely to grow by around 12% according to consensus estimates. By comparison, even the large, traditional firm Lowe’s is trading at close to 1.7x, despite the fact that sales may decline this year.
See our dashboard ‘What factors have led to a 4x change in Wayfair shares over the past three years?‘ for more details on what determines the Wayfair share price.
[3/23/2021] Why has Wayfair sourced 4x in the past 3 years?
The course of action for Wayfair, an e-commerce company that sells furniture and home goods, is up nearly 12 times from levels seen in mid-March 2020 when broad markets bottomed due to the spread of Covid-19. This is a significant outperformance against the S&P which is down 75% from its March 2020 lows. Wayfair’s outperformance is due to two major trends, namely the growing demand for home improvement products. as people spent more time at home during the pandemic, and the growing shift to e-commerce. Wayfair share is also up around 300% since the end of 2017. So is the share a buy? We think that Wayfair stock remains a solid choice for several reasons, although returns are likely to be lower than levels seen in recent years.
Most of the 4x wins over the past three years can be attributed to Wayfair’s multiple P / S earnings and rising revenue. Looking at the fundamentals of the business, its total revenue grew from around $ 6.8 billion in 2018 to around $ 14.1 billion in 2020, as the active customer base more than doubled from from around 15 million to around 31 million, with most of the gains seen thanks to the Covid. -19 pandemic. The company’s revenue per share rose from around $ 75 in 2018 to $ 148 in 2020, slightly slower than revenue, due to its stock issues which increased the number of shares of around 7% since 2018. Our dashboard, ‘What factors have led to a 4x change in Wayfair shares over the past three years?‘, has the underlying numbers. Wayfair’s P / S multiple has grown from around 1x in 2018 to 2.2x currently, due to the recent acceleration in revenue growth, a stronger outlook for e-commerce businesses and the gradual improvement in the profitability of the business. Wayfair’s EPS stood at $ 1.86 in 2020, down from a loss of $ 5.63 per share in 2018.
So what are the prospects for Wayfair?
Now, the decline in Covid-19 cases in the United States this year and the increase in the vaccination rate will mean spending in physical stores is expected to increase. However, we believe Wayfair will hold its own post after the pandemic, thanks to its massive selection, low prices, convenience, and related content for home ideas that make shopping for the home easier. The company also operates under a variety of branded retail websites, namely the main site of Wayfair, Joss & Main, AllModern, Birch Lane and Perigold. Wayfair’s customer base is also very loyal and is expected to stay with the company after Covid. In the fourth quarter of 2020, Wayfair noted that repeat customers placed 72.5% of total orders in the quarter, up from 68.6% a year ago. Investors also seem to think the company has a bright future after the pandemic, with the stock largely shrugging off the wider tech sell, rallying around 35% year-to-date.
Wayfair’s valuation seems reasonable, with stocks trading at around 2 times expected earnings in 2021 with sales likely to grow 12% in 2021 and around 20% in 2022, according to consensus estimates. By comparison, even the large, traditional firm Lowe’s is trading at nearly 1.5 times forward revenue, despite the fact that it is expected to experience little growth over the next two years. Wayfair’s addressable market is also significant, giving the company a lot of leeway to grow. The company estimates the total US housewares market to be around $ 450 billion. This compares to Wayfair’s revenue of $ 14 billion in 2020.
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