Earnings To Watch: Wayfair (W) Reports Q1 Results Tomorrow

Petr Huřťák /
2023/05/03 3:27 am EDT

Online home goods retailer Wayfair (NYSE: W) will be reporting earnings tomorrow before market hours. Here's what investors should know.

Last quarter Wayfair reported revenues of $3.1 billion, down 4.64% year on year, beating analyst revenue expectations by 1.13%. It was a weak quarter for the company, with a declining number of users and revenue. The company reported 22.1 million active buyers, down 19% year on year.

Is Wayfair buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Wayfair's revenue to decline 8.44% year on year to $2.74 billion, improvement on the 13.9% year-over-year decrease in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$1.71 per share.

Wayfair Total Revenue

The analysts covering the company have had mixed opinions about the business heading into the earnings, with revenue estimates seeing three upward and four downward revisions over the last thirty days. The company missed Wall St's revenue estimates three times over the last two years.

Looking at Wayfair's peers in the consumer internet segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. Overstock's revenues decreased 28.9% year on year, beating analyst estimates by 6.6% and Shutterstock reported revenues up 8.11% year on year, exceeding estimates by 1.77%. Overstock traded up 2.93% on the results, Shutterstock was flat on the results. Read our full analysis of Overstock's results here and Shutterstock's results here.

There is still much uncertainty in the markets. The Federal Reserve's hawkish stance on rates, meant to tame inflation, remains a key market narrative. There is an added wrinkle now with troubles in the banking sector, triggered by Silicon Valley Bank's fairly sudden and surprising collapse. Given these, the question is whether higher rates (which dampen economic activity) and potentially less lending from the overall banking sector will trigger a recession. While some tech stocks have recovered year-to-date, most are still well off their 52-week highs. Wayfair is down 11.7% over the last month, and is heading into the earnings with analyst price target of $49.7, compared to share price of $31.63.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.