What To Expect From Wayfair’s (W) Q1 Earnings

Adam Hejl /
2022/05/04 7:50 am EDT
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Online home goods retailer Wayfair (NYSE: W) will be announcing earnings results tomorrow before market hours. Here's what investors should know.

Last quarter Wayfair reported revenues of $3.25 billion, down 11.4% year on year, missing analyst expectations by 0.75%. It was a weak quarter for the company, with declining number of users and slow revenue growth. The company reported 27.3 million active buyers, down 12.5% 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 14.1% year on year to $2.98 billion, a further deceleration on the 49.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$1.53 per share.

Wayfair Total Revenue

The analysts covering the company have been growing increasingly bearish about the business heading into the earnings, with revenue estimates seeing five downward revisions over the last thirty days. The company missed Wall St's revenue estimates four 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 of what we can expect. Revolve delivered top-line growth of 58.4% year on year, beating analyst estimates by 10.4% and Overstock reported revenue decline of 18.7% year on year, missing analyst estimates by 6.49%.  Revolve was down 7.13%, and Overstock traded down 4.42% on the results. Read our full analysis of Revolve's results here and Overstock's results here.

Technology stocks have been hit hard on fears of higher interest rates and consumer internet stocks have not been spared, with share price down on average 17.8% over the last month. Wayfair is down 20.1% during the same time, and is heading into the earnings with analyst price target of $140.8, compared to share price of $90.18.

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.