DJ Wayfair Surges Ahead of Earnings. The Stock Is Up 12-Fold Since Late March. -- Barrons.com
By Eric J. Savitz
Wayfair shares surged on Monday as investors anticipated a huge spike in sales when the company reports June quarter results before the start of trading on Wednesday.
The home furnishings company had a better-than-expected first quarter and has since seen soaring demand as consumers switch to online shopping with many offline stores still closed or limiting operations amid the Covid-19 pandemic. Wayfair (ticker: W) posted nearly 20% sales growth in the March quarter; when it reported those results in early May, the company said revenue growth for the quarter at that point was trending up 90% from a year ago.
The Wall Street analyst consensus estimates call for June quarter revenue of $3.32 billion, up about 71%, but there are estimates that run north of $4 billion. The Street sees earnings for the quarter of 82 cents a share. Wayfair did not provide full guidance for the quarter.
Cowen analyst Max Spaeth thinks the Street consensus is way too low. On Monday, he lifted his second-quarter revenue forecast to $4.4 billion, which would be up 89% year-over-year, from $3.9 billion. He projects $265.7 million in adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, up from $235.6 million.
Spaeth cites the strong June quarter results from both Amazon.com and eBay as evidence of continued strength in e-commerce. (I would note that Shopify as well had far-better-than-expected results in the June quarter.) The analyst repeats his Outperform rating on Wayfair shares, and lifts his target price to $300, from $275.
Wayfair shares were up 7.1%, to $284.85, on Monday, having earlier set a new all-time high at $287.45. The stock this year is up more than 200%, and has increased 12-fold since bottoming at $23.52 in late March.
Write to Eric J. Savitz at eric.savitz@barrons.com
(END) Dow Jones Newswires
August 03, 2020 13:45 ET (17:45 GMT)
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