Wayfair (W) AI Stock Analysis

• Market Cap: $4.27B
• Dividend Yield: N/A
• Average Volume (3M): 7.91M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.52
• Revenue Growth: -0.89%
• EPS Growth: 46.62%
• Country: US
• Employees: 12,100
• Sector: Consumer Cyclical
• Sector Strength: 59
• Industry: Specialty Retail
• EPS (TTM): -2.86
• Shares Outstanding: 102,290,400
• 10 Day Avg. Volume: 6,901,201
• 30 Day Avg. Volume: 7,906,241
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.60
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 1.92
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $43.11
• Price Target Upside: 39.42% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 28

Wayfair's stock score reflects significant financial challenges with declining revenues, persistent losses, and a highly leveraged and unstable balance sheet. Technical indicators suggest a cautious approach given the bearish trend. Valuation remains a concern with a negative P/E ratio. While strategic growth initiatives and cost efficiency improvements are promising, flat revenue growth and negative free cash flow pose risks. Recent corporate governance enhancements are positive but not enough to offset financial and operational challenges.

Positive Factors

Competitive Advantage

The accelerated shipments through CastleGate provide a competitive advantage with a buffer of lower-cost inventory.

Earnings

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

Market Share

The US business was up 1.6% y/y, while the company estimates the category declined, implying continued share gains.

Negative Factors

Consumer Pressure

There's still a likely scenario where additional consumer pressure and seemingly inevitable price increases create an overhang for the stock.

Guidance

Wayfair did not provide QTD revenue trends or formal Q2 revenue guidance due to the timing of Easter and Way Day in 2025 relative to 2024 as well as macro uncertainty.

Tariff Impact

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

Wayfair Business Overview & Revenue Model

Company Description

Wayfair Inc. is an American e-commerce company that specializes in selling furniture and home goods. Founded in 2002 and headquartered in Boston, Massachusetts, Wayfair offers a vast selection of over 14 million items from more than 11,000 global suppliers. The company operates through its e-commerce platform, providing customers with a convenient and comprehensive shopping experience. Wayfair's online marketplace is designed to cater to a diverse range of styles and budgets, making it a go-to destination for home furnishings and decor.

How the Company Makes Money

Wayfair makes money through its online retail platform by selling furniture and home goods directly to consumers. The company's primary revenue stream comes from product sales, which are facilitated through its website and mobile app. Wayfair partners with a wide array of suppliers who offer their products on the Wayfair platform, with Wayfair taking a percentage of each sale as commission. Additionally, Wayfair generates revenue through value-added services such as logistics and delivery, where it provides end-to-end solutions to ensure efficient handling and shipment of products. The company also invests in marketing and customer service to enhance the shopping experience and drive sales growth. Partnerships with third-party logistics providers and a robust supply chain network further contribute to Wayfair's ability to efficiently manage inventory and fulfill orders, bolstering its revenue streams.

Wayfair Financial Statement Overview

Summary

Wayfair faces significant financial challenges with declining revenues, persistent losses, and a highly leveraged balance sheet featuring negative equity. Despite improvements in cash flow, these issues indicate operational inefficiencies and financial instability, severely impacting the overall score.

Income Statement

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

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

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.

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

Wayfair Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 30.92
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For W, the sentiment is Negative. The current price of 30.92 is above the 20-day moving average (MA) of 28.42, below the 50-day MA of 32.02, and below the 200-day MA of 43.20, indicating a neutral trend. The MACD of -0.12 indicates Negative momentum. The RSI at 51.23 is Neutral, neither overbought nor oversold. The STOCH value of 73.23 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for W.

Wayfair Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EBAY	78 Outperform	$31.62B	16.40	36.48%	1.60%	2.04%	-15.61%
CHWY	75 Outperform	$15.16B	40.77	101.78%	―	6.40%	891.13%
WSM	69 Neutral	$19.83B	18.27	53.91%	1.48%	-0.50%	24.11%
Sector *	61 Neutral	$6.64B	11.67	3.04%	3.98%	2.60%	-21.24%
ETSY	60 Neutral	$4.62B	31.47	-39.97%	―	2.18%	-32.87%
W	51 Neutral	$4.27B	―	17.86%	―	-0.89%	46.62%
RH	48 Neutral	$3.68B	54.52	-38.18%	―	5.01%	-35.45%

Wayfair Corporate Events

Wayfair Announces $700 Million Senior Secured Notes Offering

On March 11, 2025, Wayfair Inc. announced that its subsidiary, Wayfair LLC, priced a private offering of $700 million in senior secured notes due 2030. The proceeds will be used to repurchase existing convertible senior notes and for general corporate purposes. This financial maneuver is expected to impact the market price of Wayfair’s Class A common stock due to related market activities. Additionally, the company plans to enter into an amended credit agreement to extend credit facilities’ maturity to 2030 and secure commitments worth $500 million, indicating a strategic move to strengthen its financial position.

Wayfair Announces $700 Million Senior Notes Offering

On March 10, 2025, Wayfair Inc. announced that its subsidiary, Wayfair LLC, plans to offer $700 million in senior secured notes due 2030 in a private offering. The proceeds are intended to repurchase portions of existing convertible senior notes and for general corporate purposes. Concurrently, Wayfair aims to amend its credit agreement to establish a new credit facility with commitments up to $500 million, extending maturity to 2030. These financial maneuvers are expected to impact Wayfair’s market positioning by potentially influencing the market price of its Class A common stock, although there is no assurance on the completion of these transactions.

Wayfair Enhances Board and Bylaws for Strategic Growth

On February 12, 2025, Wayfair Inc. appointed Diana Frost, Global Chief Growth Officer at Kraft Heinz, to its board of directors. Her expertise in brand strategy, innovation, and consumer engagement is expected to significantly benefit Wayfair’s mission to simplify home shopping. Additionally, on the same date, Wayfair’s Board of Directors amended the company’s Bylaws to improve procedural mechanics, clarify stockholder rights, and designate specific courts for legal matters. These changes aim to enhance corporate governance and streamline operations, potentially strengthening Wayfair’s industry position.