Zelman has begun coverage of Wayfair (W, Financial), assigning it an Outperform rating. This positive assessment reflects confidence in the company's potential performance and market position. Investors are advised to consider the stock's prospects as potentially promising.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 30 analysts, the average target price for Wayfair Inc (W, Financial) is $43.95 with a high estimate of $100.00 and a low estimate of $25.00. The average target implies an upside of 14.06% from the current price of $38.53. More detailed estimate data can be found on the Wayfair Inc (W) Forecast page.
Based on the consensus recommendation from 36 brokerage firms, Wayfair Inc's (W, Financial) average brokerage recommendation is currently 2.4, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Wayfair Inc (W, Financial) in one year is $42.91, suggesting a upside of 11.37% from the current price of $38.53. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Wayfair Inc (W) Summary page.
W Key Business Developments
Release Date: May 01, 2025
- Net Revenue: Flat year over year, with a 10.9% decline in the international segment offset by a 1.6% growth in the US business.
- Gross Margin: 30.7% of net revenue, influenced by non-operational tailwinds and investments in customer experience.
- Adjusted EBITDA: $106 million, representing a 3.9% margin on net revenue.
- Cash and Equivalents: $1.4 billion, with total liquidity at $1.8 billion.
- Free Cash Flow: Negative $139 million, an improvement of almost $60 million compared to the first quarter of 2024.
- Capital Expenditures: $43 million, lower than guided due to timing and reduced headcount.
- SG&A Expenses: $366 million, down by roughly $50 million compared to the first quarter of last year.
- Advertising Expenses: 12.6% of net revenue, down from Q4.
- Guidance for Gross Margin: Expected to be in the range of 30% to 31% of net revenue for the next quarter.
- Adjusted EBITDA Margin Guidance: Expected to be in the 4% to 5% range, assuming flat net revenue.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Wayfair Inc (W, Financial) achieved a positive year-over-year growth of 1% in the US market, outperforming the category which was down.
- The company has a diverse supplier base with manufacturing capabilities in over 100 countries, providing flexibility and resilience against tariff impacts.
- Wayfair Inc (W) has successfully increased supplier advertising revenue by more than 50% in 2024, enhancing its profitability.
- The company has taken strategic steps to strengthen its financial position, including the closure of its German business and refinancing its credit facilities.
- Wayfair Inc (W) has a strong logistics network, including the CastleGate system, which helps suppliers reduce fulfillment costs and improve delivery speed.
Negative Points
- The exit from the German market led to a 10.9% decline in the international segment, impacting overall revenue.
- Wayfair Inc (W) faced a negative free cash flow of $139 million in Q1, although it was an improvement from the previous year.
- The company is navigating a challenging macroeconomic environment with uncertainties around tariffs and consumer demand.
- There is a risk of potential inventory shortages if tariffs remain, which could impact the availability of products.
- Wayfair Inc (W) has experienced a decline in its stock price, partly due to misunderstandings about the impact of tariffs on its business model.
