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Investing.com - William Blair has reiterated an Outperform rating on Wayfair (NYSE:W), citing potential for valuation expansion and balance sheet improvements. The stock, currently trading near its 52-week high with a market capitalization of $9.4 billion, has shown strong momentum with a 37.6% return over the past six months according to InvestingPro data.
The research firm believes Wayfair shares could find support from valuation expansion into the high-teens range, driven by increased visibility into sustainable sales growth and improvements in the company’s financial position. While the company generated $11.85 billion in revenue over the last twelve months, InvestingPro analysis suggests the stock is currently trading above its Fair Value.
William Blair expects Wayfair’s net debt leverage to approach 2x by year-end, marking a significant improvement from 3.5x at the end of 2024, which should enhance the marketability of the company’s shares.
The firm’s revised 2026 estimates for Wayfair include sales growth of 4% and a contribution margin of 15%, with minimal leverage across gross margin and variable operating expenses.
William Blair considers these projections conservative, suggesting potential upside from increased supplier services and productivity improvements as organic demand strengthens.
In other recent news, Wayfair reported a strong second quarter of 2025, significantly surpassing earnings expectations. The company posted an earnings per share of $0.87, far exceeding the forecasted $0.33, marking a substantial surprise of 163.64%. Revenue also outperformed projections, reaching $3.27 billion compared to the expected $3.12 billion. Canaccord Genuity responded by raising its price target for Wayfair to $84, maintaining a Buy rating due to the company’s robust performance. Raymond (NSE:RYMD) James reiterated its Strong Buy rating with a $55 price target, noting that Wayfair’s quarterly revenue exceeded both its own and consensus expectations. The company’s revenue grew approximately 6% year-over-year, excluding its Germany operations. Wayfair’s profitability and accelerating sales drove these positive evaluations, even as the overall home goods category remained relatively flat. These developments highlight Wayfair’s ability to capture market share and achieve growth despite broader industry challenges.
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