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Why Wayfair Stock Was Plummeting This Week

Why Wayfair Stock Was Plummeting This Week

Wayfair 's (NYSE: W) online portal may be a popular destination for consumers shopping for furniture and home goods, but the company hasn't been popular on the stock exchange lately. According to data compiled by S&P Global Market Intelligence , its share price had fallen by almost 14% week to date as of Friday before market open. Analysts continued to get more bearish on the company following its discouraging second-quarter results.

The snipping continued

Although Wayfair reported said results late last week, several of the resulting pundit price target cuts happened in the current five-day trading stretch.

The company is followed by a fairly large contingent of analysts, quite a few of whom weren't shy to share their new, more downbeat takes on the stock. On Monday, for example, Barclays ' Adrienne Yih cut her fair value assessment on Wayfair to $51 per share from the preceding $58.

The company's lackluster earnings report clearly didn't do anything to make her more bullish on its prospects, as she maintained her equal weight (hold) recommendation on the stock.

A disappointing double miss

Although Wayfair didn't hesitate to mention that it delivered its best quarter of profitability and cash flow in a three-year period, it failed to beat analyst estimates for either net revenue or income.

The former metric actually fell on a year-over-year basis in the second quarter, declining by almost 2% to $3.12 billion. On the other hand, non- GAAP (adjusted) net income was $69 million ($0.47 per share), nearly triple the $24 million of the year-ago period. Yet the consensus analyst top-line estimate was $3.18 billion, while that for adjusted net income was $0.48 per share.

Before you buy stock in Wayfair, consider this: