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On Tuesday, Evercore ISI analyst Oliver Wintermantel increased the price target on Wayfair (NYSE:W) shares to $40.00 from the previous $35.00 while keeping an Outperform rating on the stock. The stock, currently trading at $31.02, has shown remarkable momentum with a 13% gain over the past week, according to InvestingPro data. Wintermantel’s analysis anticipates the market’s attention on Wayfair’s upcoming Thursday metrics, which include second-quarter revenue trends, EBITDA guidance, tariff impacts, and active customer count. The analyst expects management to confirm that adjusted EBITDA dollars will grow year-over-year in 2025.
According to Wintermantel, Wayfair is projected to achieve $460 million in adjusted EBITDA in calendar year 2025, a 2% increase from the previous year, with a modest revenue growth of 0.6% year-over-year. This would mark a significant improvement from the current EBITDA of -$217 million on revenues of $11.85 billion. InvestingPro analysis shows 8 additional key metrics and insights available for subscribers. These figures are slightly below the consensus estimates, which forecast adjusted EBITDA at $467 million with flat revenues. The anticipated improvement in EBITDA is primarily attributed to cost reductions. The analyst also estimates that the active customer base remained stable compared to the fourth quarter of 2024, at around 21.4 million.
Wayfair’s newly announced membership model is seen as a potential catalyst for growth, especially when the housing market rebounds. With an overall Financial Health Score of "Fair" from InvestingPro, the company shows promise despite current challenges. Discover comprehensive analysis in the Pro Research Report, available for Wayfair and 1,400+ other US stocks. Free cash flow (FCF) predictions for calendar year 2025 range between $100 million and $115 million, a significant improvement from the cash usage of $(1.1) billion and $(2.0) million in 2022 and 2023, respectively. The analyst notes that the improved financial outlook, along with recent cash from bond deals, presents an increasingly attractive risk/reward situation for Wayfair, particularly in the second half of 2025 as cost cuts have supported adjusted EBITDA.
While tariffs pose a valuation risk, Wayfair’s third-party (3P) model may turn into a significant advantage once tariff uncertainties are resolved. Wintermantel suggests that this limits the stock’s downside risk to below $30, while offering an attractive upside potential with revenues poised for growth. The bull/bear analysis by Evercore ISI indicates a bear case downside to $20, but a bull case upside to $60. Notably, the stock’s short interest remains high at 18%. According to InvestingPro’s Fair Value analysis, the stock is currently trading near its fair value, with analyst targets ranging from $25 to $100 per share.
The $40 price target set by Evercore ISI is based on a 10.2 times multiple of the firm’s projected 2026 EBITDA of $570 million.
In other recent news, Wayfair has experienced several analyst revisions and challenges due to newly imposed tariffs. Canaccord Genuity, UBS, Truist Securities, Baird, and Citi have all adjusted their price targets for Wayfair, reflecting the current economic conditions and trade policy shifts. Canaccord Genuity reduced its price target to $58 while maintaining a Buy rating, citing potential benefits from Wayfair’s strategic supplier shifts. UBS also lowered its target to $55, noting the company’s vulnerability to cost pressures but retaining a Buy rating. Truist Securities cut its target to $36, maintaining a Buy rating, and highlighted the impact of a 125% tariff on Chinese goods. Baird adjusted its target to $33 with a Neutral rating, reflecting concerns over the home goods market and leverage risks. Citi downgraded Wayfair to Neutral, reducing the price target to $28, due to uncertainties introduced by the new tariffs. These developments underscore the challenges Wayfair faces in navigating the current economic and geopolitical landscape.
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