Wayfair's ( NYSE: W ) bottom line likely remained under significant pressure in Q2, said UBS in a new research note on the online home goods company.
UBS forecasts $107M in EBITDA losses for Q2 with margins down in the low single digit range. The investment bank believes that "combo of slower home furninshing spend and moderating online penetration in the category again drove meaningful revenue declines at Wayfair ( W )." It estimates Q2 revenue decline of 17.5% that incorporates 12% drop in the U.S and 40% in international.
Analysts also see estimates drifting lower post Q2 print, noting that "We believe Wayfair's revenues declines have moderated in 3Q QTD as it has cycled through easier compares. Still, its likely running below consensus forecast for 3Q and we believe estimates will move lower with this print. Looking ahead, the key is when will its sales stabilize and will the company have to sacrifice margins to drive sales."
UBS rates the stock as Neutral with a $50 price target ($75 previous). Its new EBITDA estimates for FY22 is $362M.
SA Quant system rates Wayfair as Strong Sell , while SA Authors rate it as hold. Shares have popped 8% today, but contracted 82% over the past year
Read a recent bearish SA analysis on the stock here
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Wayfair continued to incur meaningful losses in Q2, says UBS