wayfair stock, all you want to know about a great & 1st stocks
Wayfair Inc. is an American e-commerce company that sells furniture and home goods. Formerly known as CSN Stores, the company was founded in 2002. Their digital platform offers 14 million items from more than 11,000 global suppliers. The online company is headquartered in Boston, Massachusetts, Wayfair has offices and warehouses throughout the United States as well as in Canada, Germany, Ireland, and the United Kingdom.
Wayfair operates five branded retail websites: the main Wayfair site, Joss & Main, AllModern, Birch Lane, and Perigold.
wayfair stock History
2002 to 2006
Entrepreneurs Niraj Shah and Steve Conine founded Wayfair in August 2002, as a two-person company with a makeshift headquarters in Conine’s nursery, in Boston, Massachusetts. Both Shah and Conine hold Bachelor of Science degrees from Cornell University. The pair had run two previous companies—Simplify Mobile and iXL, a global consulting firm—before starting Wayfair.
As of December 2018, Shah is the chief executive officer, and Shah and Conine share the chairman position.
Originally known as CSN Stores (the name is derived from a mix of Shah and Conine’s initials), the company began with the website racksandstands.com, selling media stands and storage furniture.
In 2003, the company added patio and garden goods suppliers, three online stores, and more than a dozen employees, and relocated the headquarters into an office on Newbury Street, in Boston.
Over the next two years, the company expanded its catalog to include home décor; office, institutional, and kitchen and dining furniture and materials, home improvement goods; bed and bath materials; luggage; and lighting. In 2006, the company earned $100 million in sales.
2007 to 2010
For the next four years, the company expanded in the United States and in international markets.
In 2008, CSN Stores began shipping to Canada and selling in the United Kingdom, and opened an office in London. In the same year, the Boston Business Journal ranked the company the #1 fastest growing private e-commerce company in Massachusetts, and the #4 fastest growing private company overall.In 2009, the company expanded to Germany. In 2010, the company relocated its headquarters to 177 Huntington Avenue, where they occupied 10 floors. At the end of that year, the company launched Joss & Main, a members-only private sales online store.
2011 to 2019
By 2011, CSN Stores owned over 200 online shops, largely niche shops for specific products, like cookware.com, everyatomicclock.com, and strollers.com. In an effort to scale, to direct traffic to a single site, and to unify the aesthetic of the company, Shah and Conine rebranded CSN Stores as Wayfair. Wayfair, as a company name, has no real meaning; it was chosen by a brand firm.
To market the new brand and to increase its expansion, in June 2011 the company raised $165 million in funding from four investment firms: Battery Ventures, Great Hill Partners, HarbourVest Partners, and Spark Capital.
Wayfair.com launched on September 1, 2011. As of July 2012, Wayfair had consolidated all of its niche websites, with the exception of Joss & Main and AllModern, into Wayfair.com. In August 2012, Wayfair launched Wayfair Supply, a single destination for Wayfair’s business, government, and institutional customers. In August 2013, Wayfair acquired DwellStudio, a New York City-based design house and retailer focused on modern home and family furnishings.
In March 2014, T. Rowe Price led a $157 million pre-IPO financing, valuing the company at more than $2 billion.
In late June 2014, the company again relocated its headquarters, this time to 4 Copley Place, about a block away from its previous headquarters at 177 Huntington Avenue. Along with 4 Copley Place, the company has two satellite offices in the surrounding area.
In October 2014, Wayfair raised over $300 million through an IPO on the New York Stock Exchange under the ticker symbol W. In July 2015, Wayfair sold its Australian business to local online retailer Temple & Webster for an undisclosed amount. The brand was renamed to Zizo and later absorbed into the Temple & Webster business.
As of January 2014, Wayfair was the largest online-only retailer for home furniture in the United States, and the 33rd largest online retailer in the United States. The company generated $380 million in revenue in 2010, over $500 million in 2011, over $600 million in 2012, over $900 million in 2013, and over $1.3 billion in 2014. In 2015, the net revenue of Wayfair increased to $2.25 billion, to $3.4 billion in 2016 and to $4.7 billion in 2017.
Wayfair spent more than $500 million in advertising in 2017 and was on target to spend more in 2018.
In 2017, a South Dakota lawsuit aimed at forcing Wayfair to collect and pay state sales tax made it to the US Supreme Court, South Dakota v. Wayfair, Inc. The court held that states may charge tax on purchases made from out-of-state sellers, even if the seller does not have a physical presence in the taxing state.
The company hosted its first “Way Day” sale on April 25, 2018. Sales quadrupled compared to an average day in March, according to a report from analytics firm Edison Trends. The number of unique buyers on Way Day also rose nearly 400% compared to the March average, although the average order price spent on Way Day ($276) was about the same as in March ($275), according to that report.
According to an August 2018 article in The Boston Globe, Wayfair added an additional 2,000 employees in the first half of 2018, and the total number of employees approached 10,000. The company will be soon expanding to another building near Copley Square with office space for an additional 4,000 employees.
According to a marketing professor at Emory University, the company is losing $10 for every new customer acquisition.
On December 13, 2018, the Massachusetts Economic Assistance Coordinating Council approved a $31.4 million tax break for Wayfair in exchange for a pledge to increase their hiring by at least 3,000 in Boston and 300 jobs at a new call center in Pittsfield. The tax break is one of the largest-ever awarded by the state.
On March 26, 2019, Wayfair announced that its first permanent physical storefront would open in the Natick Mall in Natick, Massachusetts. The retailer had previously tested a few temporary pop-up storefronts during the 2018 holiday season, and confirmed plans to open four additional pop-up storefronts in 2019.
Investors sued Wayfair, claiming the company’s executives misled them about the company’s value and actions, losing them money as the top brass cashed out. The case was dismissed in 2020.
In May 2019, Wayfair was added to the Fortune 500 list for the first time, coming in at number 446.
During participation on a business panel on September 19, 2019, CEO Niraj Shah was asked what Wayfair was looking for in new hires and he said the company was looking for employees who are talented and non-political. According to the Boston Business Journal Shah was quoted as saying, “We’re generally just looking for people on two sets of criteria. One, it’s just that … they’re incredibly talented.
They’re intelligent, quantitative. Just that we think they have the raw material to really succeed and we feel confident. The second thing we look for — equally important — is the cultural fit. So we’re bringing in non-political, you know, highly collaborative, just very driven and ambitious.
There’s a whole lot of cultural values that we think are important while we succeeded. We only hire (those candidates) who have these two sets; both kinds of traits for success.” Later, when asked about Shah’s comments in the article, Wayfair said in a statement that Shah’s quote was “misinterpreted and inaccurately positioned in this story.”
On June 25, 2019, Wayfair employees announced plans to walk out in protest of a BCFS contract to sell beds to temporary migrant detention camps in a letter to senior management, including Niraj Shah and Steve Conine. Wayfair leadership responded indicating they would not terminate the order, and did not indicate they would donate the profit from the order (approximately $86,000) to charity, as the letter requested.
Congresswoman Alexandria Ocasio-Cortez expressed her support for the employees and the walkout. On June 26, 2019, several hundred Wayfair employees walked out.
In late October 2019, the company announced it had hired 1,500 people in the last quarter, had a net loss of $272 million, and a revenue increase of 36 percent over the previous year.
On February 13, 2020, the company announced a layoff of 550 employees or about three percent of their global workforce. The headquarters in Boston accounted for 350 of those employees let go. Chief executive Shah notified employees in an e-mail saying, “On reflection this last period of investment went on too long . . . and we find ourselves at a place where we are, from an execution standpoint, investing in too many disparate areas, with an uneven quality and speed of execution.” As of 2020, the company has yet to show a profitable quarter.
Wayfair won the 2020 Webby Award for Shopping in the category Apps, Mobile & Voice.
On July 10, 2020, Wayfair became the subject of a QAnon-affiliated conspiracy theory falsely claiming that they are engaged in child sex trafficking.
wayfair stock Operations and infrastructure
Wayfair has over 12 million square feet of warehouse space in Europe and North America with a dozen fulfillment centers. As of 2019, the company offers 14 million products from 11,000 global suppliers. Wayfair employs over 2,300 engineers and data scientists and 3,000 customer service representatives in Boston; Berlin; Ireland; and other cities in the United States. The company expected to spend more than $1 billion in marketing and advertising in 2019.
wayfair stock Board of directors
As of October 2021, the board of directors is:
|Niraj Shah||Co-Founder, Chief Executive Officer, Director (Co-Chairman)|
|Steven Conine||Co-Founder, Director (Co-Chairman)|
|Michael E. Sneed||Director|
Wayfair (W) soared during the pandemic as people spruced up their homes amid a nesting trend. But is Wayfair stock a buy as restrictions ease and folks spend elsewhere?
Founded in May 2002, Wayfair offers more than 18 million items across home furnishings, decor, home improvement and other categories.
Aside from the main site, the platform includes five other website: Joss & Main, AllModern, Birch Lane, DwellStudio and Perigold.
Its Perigold catalog is the focus of the company’s push into more high-end goods, which typically carry higher margins.
“There’s just a tremendous runway because luxury in North America is probably around about $60 billion or $70 billion of that $420 billion total addressable market,” said CEO Niraj Shah at a Jefferies investor conference on June 22.
Wayfair Stock Fundamental Analysis
Fueled by consumer spending on home furnishings during stay-at-home orders, Wayfair finished 2020 with an adjusted full-year profit of $5.04 a share, swinging from a 2019 loss of $8.03 a share. That marked its first full year of profitability.
The Boston-based company had $14.1 billion in 2020 sales, up 55%. The IBD Stock Checkup tool shows Wayfair boasts a three-year sales growth rate of 42%.
Wayfair reported mixed second-quarter results. It easily beat views on the bottom line, but revenue unexpectedly fell. Wayfair stock jumped.
It posted EPS of $1.89 a share on sales of $3.86 billion. Wall Street had expected Wayfair to report earnings of $1.16 a share on sales of $3.93 billion, according to FactSet. Revenue fell 10% from the year-ago period, after eight quarters in a row of double-digit gain
“While the current macro environment is dynamic, the home remains a high priority for our customers and longer term tailwinds to online category growth are firmly in place,” Shah said in a statement.
The number of active customers reached 31.1 million as of June 30, 2021, an increase of 19.6% year over year. However, that’s below Q1’s 33.2 million active customers.
The average order value grew to $278 for the second quarter of 2021, compared to $227 in the year-ago quarter.
How Wayfair Harnesses Digital Tools
Whether it was desks and chairs for telecommuters, play sets for home-schooled children in need of a way to burn excess energy or seasonal decor to cheer up the holiday season, shoppers flocked to Wayfair.
The key to making shoppers feel comfortable buying furniture online is to make it easy to imagine what the product might look like in their homes. Wayfair uses 3D models and imagery to assist buyers.
Another challenge is delivering large, bulky items is a cost-effective way, quickly and without damaging them. And when things go wrong, to make the return experience as painless as possible.
The strategy appears to be working — and boosting Wayfair stock. Repeat customers placed 10.9 million orders in Q1, an increase of 58.9% year over year.
Wayfair Stock Technical Analysis
Wayfair stock had its initial public offering in October 2014. W stock is trading below its 50-day and 200-day line, according to MarketSmith chart analysis. It hit a 52-week high intraday on Jan. 14 but has since retreated from that high.
Its relative strength line is trending upward again, following its Q2 earnings report. The RS line tracks a stock’s performance vs. the S&P 500 index. Wayfair stock has an RS Rating of 12 out of a possible 99. The RS Rating tracks a stock’s performance vs. all stocks over the last 12 months, with emphasis on the past three months.
Wayfair ranks No. 30 in IBD’s Retail-Internet Group.
W stock has an EPS Rating of 32 and a Composite Rating of 17. About 74% of Wayfair stock is owned by institutional investors, with 1,159 funds owning shares as of June 2021.
Big-Box Retailers, Amazon Pose Challenges
U.S. furniture and bedding sales reached an estimated $115 billion in 2020, according to Furniture Today estimates. The figure is based on data from the U.S. Department of Commerce’s Bureau of Economic Analysis. Research firm IBISWorld says about $47 billion is from online sales.
The market for online home goods and furniture is highly competitive and fragmented, CFRA Research analyst Tuna Amobi. “While Wayfair is mainly focused on the mass market, it competes across all segments of the market, including furniture stores and specialty retailers, larger online retailers and marketplaces, big-box retailers, and department stores,” he wrote in a recent note to clients.
Before the pandemic, Amazon (AMZN) and Wayfair captured the bulk of online furniture sales. Wayfair had 33.4% market share in 2019, the most recent data available, leapfrogging Amazon and its 29.7% share, industry tracker digitalcommerce360.com says. The next closest retailer is Walmart (WMT) with just 4.7%. Target (TGT) had 2.6%.
Other Wayfair competitors include Home Depot (HD) and Lowe’s (LOW), especially for outdoor furniture.
Can Wayfair Keep The Momentum Post Pandemic?
Management says that while early on people flocked to Wayfair out of necessity, many returned because they liked what they saw.
But as the pandemic restrictions ease and shoppers return to physical stores, Wayfair may have more competition. A lot will also depend on execution, too. As demand grows, Wayfair’s fulfillment and delivery systems will be put to the test. This is key to one of its growing demographics: millennials.
The tech-savvy group, which comprises 80 million people from age 20 to 37, has a median household income of $75,000. Wayfair customers between the ages of 31 and 50 make up for about 45% of sales.
Wedbush’s Basham is optimistic about the outlook for Wayfair stock. He said: “Macro drivers remain solid into 2021, with consumers spending more on the home, shifting from smaller to larger purchases and housing strength further driving sales; additional fiscal stimulus could also further boost sales.”
Is Wayfair Stock A Buy Now?
Wayfair has a relatively limited operating track record with a history of losses, along with significant competitions from larger rivals.
Wayfair stock has cooled off since rising quickly in the months following Covid shutdowns. Shares have been volatile for several months, during which they have bobbed above and below the 50-day moving average.
Bottom line: W stock is not a buy right now as shares are not in a buy zone yet. Still, with a growing customer base, over 10,000 suppliers and plans to branch out into related product categories such as plumbing, flooring and appliances, Wayfair is a stock to watch.
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