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On Thursday, Evercore ISI analyst Oliver Wintermantel increased the price target for Wayfair (NYSE:W) shares to $45.00, up from the previous target of $40.00, while reiterating an Outperform rating. The adjustment follows Wayfair’s report of a first-quarter earnings beat and a second-quarter guide that matched market expectations. According to InvestingPro data, Wayfair’s stock currently trades at $31.23, with analyst targets ranging from $25 to $100, reflecting the stock’s characteristic high volatility.
Wintermantel noted that Wayfair’s management believes the company can continue to grow EBITDA and free cash flow (FCF) in 2025. The analyst highlighted that the online furniture retailer’s marketplace platform might mitigate the impact of tariffs, which has been a concern for investors. Despite a backdrop of home furnishing sales trending below expectations, Wayfair’s cost management efforts are enabling the company to reinvest in advertising, supplier support, and growth initiatives. InvestingPro data shows the company generated $244 million in levered free cash flow over the last twelve months, despite an EBITDA of -$217 million, demonstrating improving operational efficiency.
Wayfair’s market position is strengthening, as indicated by its increasing market share in a challenging home furnishings market. The analyst pointed out that the growth in EBITDA and FCF has positioned Wayfair to reduce its debt. The company recently issued a second high-yield bond and refinanced its revolving credit facility, which extends to 2030, resulting in the most robust capital structure it has seen in years. This financial maneuvering addresses approximately $400 million in maturities due over the next two years and alleviates concerns over roughly $1 billion in convertible notes due in 2025 and 2026.
The first-quarter financial results showed a 30% year-over-year improvement in FCF, even with flat sales figures. Based on these positive developments, Wintermantel has raised the base case for Wayfair’s stock price. The new target is based on an 11x multiple of the projected $600 million EBITDA in 2026, which the analyst believes is warranted given Wayfair’s share gains and strong potential for EBITDA growth in the coming years. InvestingPro analysis indicates the stock is currently trading near its Fair Value, with analysts projecting profitability this year despite recent challenges. For deeper insights into Wayfair’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, which provides detailed analysis of the company’s financial health and market position.
In other recent news, Wayfair reported impressive financial results for the first quarter of 2025, with earnings per share of $0.10, surpassing the expected loss of $0.22. The company’s revenue reached $2.73 billion, slightly exceeding the forecast of $2.71 billion. Analysts from JPMorgan, Stifel, and Mizuho (NYSE:MFG) have adjusted their price targets for Wayfair, reflecting the company’s strong performance and strategic decisions. JPMorgan maintained an Overweight rating while lowering the price target to $48, citing Wayfair’s conservative outlook amidst macroeconomic uncertainties. Stifel raised its price target to $32 and maintained a Hold rating, noting Wayfair’s steady revenue and strategic positioning in the market. Meanwhile, Mizuho reduced its price target to $50 but continued to endorse the stock with an Outperform rating, highlighting the company’s potential for growth. Analysts have noted that Wayfair’s exit from the German market and reduced international losses contribute positively to its margin outlook. The company’s CastleGate logistics service is also seen as a competitive advantage, with more suppliers engaging with the platform. These recent developments indicate Wayfair’s resilience in a challenging economic environment.
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