Stifel raises Wayfair stock price target to $32, maintains hold rating

On Thursday, Stifel analysts adjusted their outlook on Wayfair stock, increasing the price target to $32 from the previous $29 while retaining a Hold rating on the shares. The adjustment comes after the company reported a steady top-line performance for the first quarter, with annual revenue of $11.85 billion and a gross margin of 30.16%. According to InvestingPro data, the stock currently trades at $31.23, near its Fair Value, with analysts setting targets ranging from $25 to $100.

Wayfair has been managing the challenges of a difficult economic landscape, with the company expressing confidence in its ability to mitigate the impact of tariffs. According to Stifel, Wayfair believes that suppliers are likely to absorb much of the incremental cost associated with tariffs. Despite posting an EBITDA of -$217 million in the last twelve months, InvestingPro analysis suggests the company could turn profitable this year. Additionally, the company sees the current market conditions as an opportunity to adopt an offensive strategy and capture greater market share, as competitors may resort to more conservative approaches.

The home goods e-commerce giant is also benefiting from favorable market dynamics in the furniture sector, which is characterized by high levels of substitutability and a predominance of unbranded goods. This environment potentially gives Wayfair an edge as it can offer a wide variety of products to consumers looking for alternatives. With a beta of 3.73, the stock shows significant volatility, presenting both risks and opportunities for investors. Get deeper insights into Wayfair’s market position and growth potential with InvestingPro’s comprehensive research report, part of its coverage of over 1,400 US stocks.

Stifel noted that more suppliers are engaging with Wayfair’s logistics and fulfillment service, CastleGate, which the firm views as a distinct competitive advantage. Furthermore, concerns around pull-forward demand, where customers make purchases earlier than they otherwise would, have not emerged as an issue for Wayfair at this stage.

Looking ahead to the second quarter, the company expects margins and operating expenses to remain stable, assuming flat revenue year-over-year. This reflects a continuation of the seasonal patterns observed in 2023 and 2024. In light of these factors, Stifel has made slight revisions to their estimates for Wayfair and adjusted the price target accordingly.

In other recent news, Wayfair Inc (NYSE:W). reported a significant earnings beat for Q1 2025, with earnings per share reaching $0.10, surpassing the forecast of -$0.22. The company’s revenue was slightly above expectations at $2.73 billion, compared to the projected $2.71 billion. Mizuho (NYSE:MFG) Securities responded to these results by adjusting its outlook on Wayfair, reducing the stock price target from $60 to $50, while maintaining an Outperform rating. The revision was influenced by Wayfair’s financial performance, which showed revenue growth of approximately 2%, considering factors like the Leap Day and the company’s exit from the German market. Analysts from Mizuho noted that Wayfair’s margin potential is not fully appreciated, highlighting the company’s undervalued stock price as a reason to sustain a positive stance. Wayfair’s CFO, Kate Gulliver, indicated strong trends for the second quarter, though she mentioned complexities in forecasting due to extended promotional events and potential shifts in consumer demand. Wayfair’s adjusted EBITDA reached $106 million, with a 3.9% margin, and the company reported $1.4 billion in cash and $1.8 billion in total liquidity. These developments reflect Wayfair’s ability to navigate a challenging market environment and maintain its competitive positioning.

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