Wayfair Stock Drop Looks Sharp, But How Deep Can It Go?
Wayfair (W) stock is down 7.8% in a day. The recent slide reflects renewed concerns around high valuation, slow consumer demand, and insider selling, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Wayfair stands today.
- Size: Wayfair is a $13 Bil company with $12 Bil in revenue currently trading at $101.41.
- Fundamentals: Last 12 month revenue growth of 3.4% and operating margin of -0.5%.
- Liquidity: Has Debt to Equity ratio of 0.31 and Cash to Assets ratio of 0.39
- Valuation: Wayfair stock is currently trading at P/E multiple of -35.7 and P/EBIT multiple of -53.0
- Has returned (median) 47.2% within a year following sharp dips since 2010. See W Dip Buy Analysis.
These metrics point to a Weak operational performance, alongside Moderate valuation – making the stock Unattractive. For details, see Buy or Sell W Stock
That brings us to the key consideration for investors worried about this fall: how resilient is W stock if markets turn south? This is where our downturn resilience framework comes in. Suppose W stock falls another 20-30% to $71 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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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 $112.55 on 27 November 2025 , and currently trades at $101.41
| W | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -91.8% | -25.4% |
| Time to Full Recovery | Not Fully Recovered | 464 days |
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
| W | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -78.6% | -33.9% |
| Time to Full Recovery | 36 days | 148 days |
2018 Correction
- W stock fell 53.4% from a high of $171.57 on 12 March 2019 to $79.87 on 5 December 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 6 May 2020
| W | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -53.4% | -19.8% |
| Time to Full Recovery | 153 days | 120 days |
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