Wayfair Stock To $74?

Wayfair (W) stock has jumped 23% during the past day, and is currently trading at $106.52. Our machine-driven multi-factor assessment suggests that it may be time to sell W stock. We have, overall, a pessimistic view of the stock, and a price of $74 may not be out of reach. We believe there are several things to fear in Wayfair stock given its overall Weak operating performance and financial condition. In addition, keeping in mind its High valuation, we think that the stock is Unattractive.

Below is our assessment:

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Let’s get into details of each of the assessed factors but before that, for quick background: With $14 Bil in market cap, Wayfair provides e-commerce services offering a wide selection of furniture, décor, housewares, and home improvement products in the United States and internationally.

[1] Valuation Looks High

This table highlights how W is valued vs broader market. For more details see: W Valuation Ratios

[2] Growth Is Inconsistent

• Wayfair has seen its top line shrink at an average rate of -0.3% over the last 3 years
• Its revenues have grown 3.4% from $12 Bil to $12 Bil in the last 12 months
• Also, its quarterly revenues grew 8.1% to $3.1 Bil in the most recent quarter from $2.9 Bil a year ago.

This table highlights how W is growing vs broader market. For more details see: W Revenue Comparison

[3] Profitability Appears Very Weak

• W last 12 month operating income was $-58 Mil representing operating margin of -0.5%
• With cash flow margin of 4.0%, it generated nearly $494 Mil in operating cash flow over this period
• For the same period, W generated nearly $-325 Mil in net income, suggesting net margin of about -2.7%

This table highlights how W profitability vs broader market. For more details see: W Operating Income Comparison

[4] Financial Stability Looks Very Strong

• W Debt was $3.6 Bil at the end of the most recent quarter, while its current Market Cap is $14 Bil. This implies Debt-to-Equity Ratio of 26.1%
• W Cash (including cash equivalents) makes up $1.2 Bil of $3.1 Bil in total Assets. This yields a Cash-to-Assets Ratio of 39.3%

[5] Downturn Resilience Is Weak

W has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• W stock fell 91.8% from a high of $345.47 on 22 March 2021 to $28.35 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $106.52 on 28 October 2025 $106.52

 
2020 Covid Pandemic

• W stock fell 78.6% from a high of $109.87 on 22 January 2020 to $23.52 on 19 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 24 April 2020

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read W Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.