Can Wayfair’s Stock Rebound Post A 15% Fall Over The Last Month?

Wayfair (NYSE: W), an e-commerce marketplace that sells furniture and home goods, has seen its stock decline by almost 15% over the last month (about 21 trading days), compared to the S&P 500 which was down almost 6% over the same period. There appear to be a couple of factors weighing on the stock. As various geographies gradually reopened post the 2020 lockdown, consumers naturally shifted their spending toward travel and entertainment and from e-commerce toward brick-and-mortar. The concerns that online spending on home furnishings could further slow down as people head back to brick and mortar stores – could eventually impact Wayfair’s topline growth rates. Moreover, the retailer is also seeing rising supply chain issues and growing logistics costs through the Covid-19 re-opening. This could, in turn, impact Wayfair’s margins in the coming quarters.

Wayfair saw its third-quarter U.S. net revenue decline 21% year-over-year (y-o-y) to $2.6 billion. Its total net revenue fell 19% y-o-y to $3.1 billion, which was marked by a striking slide in the number of orders by repeat customers. In fact, the bottom line was also no better with a net loss of $78 million in the quarter.

Now, is W stock poised to decline in the short term or are gains looking more likely? Based on our machine learning analysis of trends in the stock price over the last seven years, there is a 59% chance of a rise in W stock over the next month (twenty-one trading days). See our analysis on W’s Stock Chance Of Rise for more details.

If you are considering W stock as an investment option over a longer time frame, you can explore our forecast for Wayfair’s Revenue dashboard.

Calculation of ’Event Probability’ and ’Chance of rising’ using last 7 years data

[1] Returns of 2.7% or higher over the five-day period on 688 occasions out of 1849 (37%); Stock rose in the next five days in 368 of these 688 instances (53%)

[2] Returns of -7% or lower over the ten-day period on 446 occasions out of 1844 (24%); Stock rose in the next ten days in 237 of these 446 instances (53%)

[3] Returns of -15% or lower over the twenty-one-day period on 252 occasions out of 1833 (14%); Stock rose in the next twenty-one days in 149 of these 252 instances (59%)It is helpful to see how its peers stack up. W Peers shows how Wayfair compares against peers on metrics that matter. You will find other useful comparisons for companies across industries at Peer Comparisons.

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