Stock of the Week: Wayfair

This is what happens when malls re-open.

Andrew Willis 21 March, 2022 | 4:08AM
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Andrew Willis: What happens to online shopping post-pandemic? Well, Wayfair (W)’s most recent quarterly results suggest that we’re quickly moving back into real stores.

After a rough year to date, we now feel the stock price is back to a range that’s fairly valued. Senior equity analyst Jaime Katz says as customer behaviour shifted with the economic reopening, so has the direction of funds from their wallets.

In the online space with Wayfair, we saw the total number of active customers fall more than twelve percent in the fourth quarter, with repeat customer orders falling twenty-three percent. Meanwhile, the implied cost of onboarding each of those customers remained above $100 U.S. dollars in the third quarter…

But the home goods space is still a fragmented market, where a web-based offering is still helping Wayfair bring together customers in an industry it pegs at 840 billion U.S. dollars, between North America and Europe alone.

We also see significant growth potential for Wayfair on the international and B2B front, where it’s early days for the company. So as we return to in-person shopping, it might be worth keeping an eye on e-commerce stocks while brick-and-mortar stores strike back.

For Morningstar, I’m Andrew Willis.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Wayfair Inc Class A50.22 USD-2.33Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor at Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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