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Why Is Wayfair (W) Up 0.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Wayfair (W - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wayfair due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Wayfair Q1 Loss Narrower Than Anticipated, Revenues Miss
Wayfair Inc. reported first-quarter 2020 non-GAAP loss of $2.30 per share, narrower than the Zacks Consensus Estimate of a loss of $2.55.
Total revenues came in at $2.33 billion, up 19.8% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
The increase in revenues was driven by strong acceleration in new and repeat customer orders. Also, increase in active customers and strength in the company's direct retail business aided year-over-year revenue growth.
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $2.3 billion, which increased 20.3% year over year.
Active customers increased 28.6% from the prior-year quarter to 21.1 million. Also, LTM net revenues per active customer increased 1.6% year over year to $449 million.
Total number of orders delivered in the reported quarter was 9.9 million, up 21% year over year. In addition, orders per customer in the quarter were 1.86 million, reflecting an increase of 0.5% from the year-ago period. Further, repeat customers placed 6.9 million orders in the first quarter, up 27.9% year over year.
Operating Results
In the first quarter, Wayfair’s gross margin was 24.9%, up 70 basis points on a year-over-year basis.
Adjusted EBITDA margin was (5.5%) compared with (5.3%) in the year-ago quarter. This was due to increasing investments, mainly in international regions served.
The company’s operating expenses of $841.2 million increased 26.7% year over year. Operating loss was $262.1 million, wider than the prior-year loss of $193.6 million.
Balance Sheet & Cash Flow
At the end of the first quarter, cash, cash equivalents and short-term investments were $891 million, down from $987 million in the prior quarter. Accounts receivables were $110.3 million, up from $99.7 million in the fourth quarter.
Cash from operations was ($256.3) million and capital expenditure totaled $60 million. Free cash flow was ($354.6) million compared with ($158.5) million in the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 124.3% due to these changes.
VGM Scores
Currently, Wayfair has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wayfair has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
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Why Is Wayfair (W) Up 0.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Wayfair (W - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Wayfair due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Wayfair Q1 Loss Narrower Than Anticipated, Revenues Miss
Wayfair Inc. reported first-quarter 2020 non-GAAP loss of $2.30 per share, narrower than the Zacks Consensus Estimate of a loss of $2.55.
Total revenues came in at $2.33 billion, up 19.8% year over year. However, the figure missed the Zacks Consensus Estimate by 0.4%.
The increase in revenues was driven by strong acceleration in new and repeat customer orders. Also, increase in active customers and strength in the company's direct retail business aided year-over-year revenue growth.
Quarter in Detail
Direct retail net revenues — including sales generated primarily through Wayfair’s sites — were $2.3 billion, which increased 20.3% year over year.
Active customers increased 28.6% from the prior-year quarter to 21.1 million. Also, LTM net revenues per active customer increased 1.6% year over year to $449 million.
Total number of orders delivered in the reported quarter was 9.9 million, up 21% year over year. In addition, orders per customer in the quarter were 1.86 million, reflecting an increase of 0.5% from the year-ago period. Further, repeat customers placed 6.9 million orders in the first quarter, up 27.9% year over year.
Operating Results
In the first quarter, Wayfair’s gross margin was 24.9%, up 70 basis points on a year-over-year basis.
Adjusted EBITDA margin was (5.5%) compared with (5.3%) in the year-ago quarter. This was due to increasing investments, mainly in international regions served.
The company’s operating expenses of $841.2 million increased 26.7% year over year. Operating loss was $262.1 million, wider than the prior-year loss of $193.6 million.
Balance Sheet & Cash Flow
At the end of the first quarter, cash, cash equivalents and short-term investments were $891 million, down from $987 million in the prior quarter. Accounts receivables were $110.3 million, up from $99.7 million in the fourth quarter.
Cash from operations was ($256.3) million and capital expenditure totaled $60 million. Free cash flow was ($354.6) million compared with ($158.5) million in the fourth quarter.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month. The consensus estimate has shifted 124.3% due to these changes.
VGM Scores
Currently, Wayfair has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Wayfair has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.