Wayfair Inc (NYSE: W), an American e-commerce seller of furniture and home goods, has reported strong first-quarter revenue. As a result, some experts praised the company and uplifted the notion of its stock. For example, Piper Sandler analyst Peter Keith said the home-furnishings retailer is “significantly undervalued” and raised Wayfair price target to $225 per share from $220.
According to Piper Sandler analyst, Wayfair is “a high-growth, asset-light company that should be profitable going forward.” In April, Wayfair saw a boost in sales, as people started spending more time investing in and upgrading their homes. As Keith said, strong consumer demand “improved Wayfair’s standing with suppliers, and allowed for significant new customer acquisition.”
For Q1 2020, Wayfair reported $2.3 billion in revenue, which is 19.8% up compared with Q1 2019. Besides, Wayfair has seen a 29% growth in active customers, with further gaining momentum in the second quarter. But the retailer’s net loss has also been huge, $285.87 million, or $3.04 a share, increasing from $200.39 million, or $2.20 a share, a year earlier.
Wayfair CEO Niraj Shah said:
“The broader market disruption has highlighted the many differentiated advantages we have built as the e-commerce leader in Home over the last two decades. Millions of new shoppers have discovered Wayfair while they shelter in place at home, and we are seeing a strong acceleration in new and repeat customer orders across almost all classes of goods and across all regions.”
CNBC’s Jim Cramer has also commented on Wayfair’s sales growth. He said that changing consumer behavior during the coronavirus pandemic had “rescued” the retailer.
Another analyst, Jaime Katz from Morningstar, sees a “significant growth potential but also corresponding expenses to achieve market share gains.”
Wayfair Stock Heading to $225
While Wall Street still undervalues Wayfair, its stock has rocketed about 800% since its bottom of $23.52 in March. Besides, Wayfair stock is now performing much better than it did at the beginning of the year. In January, its price was $93.14 per share. In March, it reached a trough on the peak of the COVID-19 pandemic. By now, Wayfair stock has rebounded over and above. On May 11, it reached the all-time highest closing price of $190.27.
On Tuesday, Wayfair stock ended the trading session 12.87% up, $188.63 per share. During the day, its price range varied from $174.50 to $190.62. After hours, Wayfair shares rose by 0.73% to $190.00. In the early trading today, Wayfair stock is 0.36% up, or $189.31. Its market cap is 17.851 billion.
Peter Keith may be right, shifting his price target for Wayfair stock. There is every indication that it is heading towards a $225 level.
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