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Wayfair Inc Class A W

Morningstar Rating
$57.75 +3.02 (5.52%)
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Company Report

Wayfair Set to See Consistently Positive Adjusted Earnings as Cost Initiatives Pay Off

Wayfair plays in the fragmented home goods market in North America and Western Europe ($800 billion-plus global opportunity), offering more than 30 million products from more than 20,000 suppliers. We think its differentiation comes from its breadth of products and logistics network, which permits faster delivery with fewer touch points and less product damage than its peers. However, we believe Wayfair lacks brand strength, evidenced by its elevated advertising spending relative to peers and customer acquisition costs. Moreover, we think peers will continue to attempt faster delivery, spurring rising competition. Targeting a wide consumer base of customers aged 25-54 years with an average household income of $60,000-$175,000 means Wayfair is competing with mass-market retailers, specialty retail, and low-cost providers, making it harder to stay top of mind. This, along with no switching costs, underlies our no moat rating.

Price vs Fair Value

W is trading at a 45% discount.
Price
$54.73
Fair Value
$451.00
Uncertainty
Very High
1-Star Price
$397.00
5-Star Price
$32.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Different brands in the Wayfair portfolio cater across income and age demographics, offering some resilience in cases of economic cyclicality and economic uncertainty.

Bears

Low customer switching costs, along with the proliferation of other e-commerce and mass-merchant competitors in the home furnishing category, may bound long-term margin expansion. If Amazon or big-box retailers pursue growth in the market aggressively, it could lead to higher customer acquisition costs.

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News

Trading Information

Previous Close Price
$54.73
Day Range
$54.5558.40
52-Week Range
$29.5190.71
Bid/Ask
$57.75 / $58.28
Market Cap
$6.95 Bil
Volume/Avg
3.7 Mil / 4.1 Mil

Key Statistics

Price/Earnings (Normalized)
Price/Sales
0.52
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

Wayfair engages in e-commerce in the United States (87% of 2023 sales), Canada, the United Kingdom, Germany, and Ireland. At the end of 2023, the firm offered more than 30 million products from more than 20,000 suppliers under the brands Wayfair, Joss & Main, AllModern, Birch Lane, and Perigold. Its offerings include furniture, everyday and seasonal decor, decorative accents, housewares, and other home goods. Wayfair was founded in 2002 and began trading publicly in 2014.
Sector
Consumer Cyclical
Industry
Internet Retail
Stock Style Box
Small Value
Total Number of Employees
14,400

Competitors

Valuation

Metric
W
SHW
RH
Price/Earnings (Normalized)
29.7738.07
Price/Book Value
21.19
Price/Sales
0.523.471.75
Price/Cash Flow
30.7421.5011.56
Price/Earnings
W
SHW
RH

Financial Strength

Metric
W
SHW
RH
Quick Ratio
0.730.410.25
Current Ratio
0.850.831.26
Interest Coverage
−41.888.391.53
Quick Ratio
W
SHW
RH

Profitability

Metric
W
SHW
RH
Return on Assets (Normalized)
−3.73%11.15%3.17%
Return on Equity (Normalized)
73.63%103.95%
Return on Invested Capital (Normalized)
−8.05%18.14%7.96%
Return on Assets
W
SHW
RH
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