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On Thursday, Goldman Sachs analyst Eric Sheridan adjusted the price target for Wayfair (NYSE:W) stock, raising it slightly from $50.00 to $51.00 while reiterating a Buy rating. Currently trading at $30.16, with a market capitalization of $3.83 billion, Wayfair shows significant volatility in its stock performance. Sheridan’s analysis followed Wayfair’s announcement of first-quarter 2025 revenue and profitability that surpassed both Goldman Sachs estimates (GSe) and the consensus for the fourth consecutive quarter since going public. According to InvestingPro analysis, the company appears undervalued based on its Fair Value calculations.
Wayfair’s recent financial performance has been attributed to several factors, including a steady increase in healthcare utilization, which has led to an 11% year-over-year rise in volume-based revenue. The company also saw a significant uptick in its larger customer base, with those generating over $100,000 in annual recurring revenue growing by more than 15% compared to the previous year. Additionally, Wayfair reported an improvement in net retention, climbing to 114% from 110% in the fourth quarter of 2024. Despite generating $11.85 billion in revenue, InvestingPro data reveals the company faces challenges with a current ratio of 0.79, indicating potential liquidity concerns.
Despite acknowledging the challenge of sustaining the level of revenue outperformance seen in fiscal year 2024, especially against the backdrop of a one-time benefit from a competitor clearinghouse event, Sheridan remains optimistic. The analyst suggests that there is upside risk to Wayfair’s fiscal year 2025 guidance if current demand trends continue, coupled with a competitive share shift indicated by increased large Request for Proposal (RFP) activity and positive payments trends. While currently showing negative EBITDA of -$217 million, InvestingPro analysis indicates analysts expect the company to turn profitable this year.
Sheridan also points to the potential for multiple expansion, based on Wayfair’s ability to continue its quarterly beat-and-raise pattern, as demonstrated in the first quarter of 2025, along with anticipated improvements in cash flow generation and deleveraging efforts as the company reduces its net interest burden.
Wayfair’s updated fiscal year 2025 guidance and its consistent performance have led Goldman Sachs to maintain a positive outlook on the company’s stock, culminating in the decision to raise the 12-month price target to $51.
In other recent news, Wayfair has seen a series of adjustments to its stock price targets by various analyst firms, reflecting the current economic landscape and tariff-related challenges. Evercore ISI raised its price target for Wayfair to $40 while maintaining an Outperform rating, anticipating growth in adjusted EBITDA for 2025 despite modest revenue increases. Canaccord Genuity lowered its price target to $58, maintaining a Buy rating, and highlighted Wayfair’s strategic shift to suppliers in Southeast Asia as a potential advantage amidst tariff uncertainties. UBS also reduced its price target to $55 but kept a Buy rating, noting the company’s vulnerability to tariff-related cost pressures and the potential need for price adjustments. Truist Securities revised its target down to $36, maintaining a Buy rating, as new tariffs on Chinese imports pose challenges to Wayfair’s profit margins. Baird analysts set a new price target of $33 with a Neutral rating, citing a downturn scenario already reflected in the stock price and the need for adjusted earnings estimates. These developments underscore the complex environment Wayfair is navigating, with analysts noting both challenges and potential resilience in the company’s financial strategy.
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