Bernstein analyst Nikhil Devnani maintained a Hold rating on Wayfair (W – Research Report) yesterday and set a price target of $45.00.
Nikhil Devnani has given his Hold rating due to a combination of factors influencing Wayfair’s current financial situation. The company has shown signs of returning to growth, particularly in the US market, with a slight increase in revenue during the fourth quarter of 2024. However, this growth comes with rising customer acquisition costs, which have increased due to higher advertising expenses. Wayfair’s management believes these costs are temporary and will eventually lead to greater returns, but this leverage remains to be proven.
Additionally, while Wayfair is committed to improving EBITDA through fixed cost efficiencies, there are concerns about the potential impact of tariffs and the company’s ability to maintain favorable unit economics in 2025. Despite a positive outlook for revenue growth, the company’s margins are under pressure, particularly due to increased spending on new advertising channels. These factors contribute to a cautious outlook, leading to the Hold rating as the company navigates these challenges while aiming for profitability improvements.
According to TipRanks, Devnani is a 5-star analyst with an average return of 28.3% and an 81.82% success rate. Devnani covers the Consumer Cyclical sector, focusing on stocks such as Wayfair, Etsy, and eBay.
In another report released on February 21, Loop Capital Markets also maintained a Hold rating on the stock with a $45.00 price target.