Wayfair (W, $148.49) share plunges 12% over high expenses and little profits
Shares of the online furniture retailer, Wayfair, fell as much as 12% on Thursday over high costs and widening losses, even though the company clocked double-digit growth in revenue for the first quarter of 2019.
Revenue rose 39% to $1.94 billion in Q1 versus an estimated $1.92 billion. However, losses widened to $200.4 million, that is, $2.20 per share, from $107.8 million, or $1.22 a share, during the same period a year ago. The company also saw 16.4 million active customers in the first quarter, a rise of 39% from the previous year’s quarter.
Despite the growth in the number of repeat customers and rise in the average order value to $237 in Q1, the company is still struggling with expenses that are putting pressure on the bottom line.
The company has also initiated a number of investments that include logistics infrastructure, new product offerings and efforts to acquire new customers. In the first quarter, customer acquisition costs stood at $88 per customer.
Analysts have been highlighting that while the Boston-based retailer has mastered the art of selling furniture online, it is still weak in garnering profits.
Despite Thursday’s vast sell-off, Wayfair’s stock, which is valued at $13.3 billion, has climbed 61% this year and in the past 12 months, it has surged more than 95%.
W's Stochastic Oscillator remains in oversold zone for 5 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Show more
Notable companies
The most notable companies in this group are Amazon.com (NASDAQ:AMZN), PDD Holdings (NASDAQ:PDD), Alibaba Group Holding Limited (NYSE:BABA), JD.com (NASDAQ:JD), eBay (NASDAQ:EBAY), Chewy (NYSE:CHWY), Vipshop Holdings Limited (NYSE:VIPS), Wayfair (NYSE:W), Just Eat Takeaway.com N.V. (OTC:JTKWY), Jumia Technologies AG (NYSE:JMIA).
Industry description
The internet retail industry includes companies that sell products and services through the Internet. With more and more consumers using online retailers, the companies have seen a big increase in the use of their services. Some of the companies in the group are focused on selling business-to-business products and services. Others sell business-to-consumer products and services. Internet retailers offer a wide variety of products like books, apparel, and electronics. Some companies even specialize in only one or two categories. One potentially critical factor for players to thrive in this space is the quality and speed of product delivery. This requires an investment in efficient distribution networks. Things like logistics are important factors in the success in the extremely competitive industry. For a company to stay relevant in the industry it must have effective pricing strategies and upgraded websites. The websites must be easy to navigate and engaging for customers. In addition to the revenues generated from straight sales, internet retailers can generate revenue from subscription fees and advertising. Amazon.com, Inc., Alibaba Group, and JD.com are some of the global leaders.
Market Cap
The average market capitalization across the Internet Retail Industry is 33.65B. The market cap for tickers in the group ranges from 622 to 1.9T. AMZN holds the highest valuation in this group at 1.9T. The lowest valued company is RBZHF at 622.
High and low price notable news
The average weekly price growth across all stocks in the Internet Retail Industry was -2%. For the same Industry, the average monthly price growth was 1%, and the average quarterly price growth was 8%. PRTS experienced the highest price growth at 9%, while LGCB experienced the biggest fall at -47%.
Volume
The average weekly volume growth across all stocks in the Internet Retail Industry was -15%. For the same stocks of the Industry, the average monthly volume growth was -31% and the average quarterly volume growth was -17%
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Valuation Rating: 62
P/E Growth Rating: 67
Price Growth Rating: 59
SMR Rating: 80
Profit Risk Rating: 90
Seasonality Score: 11 (-100 ... +100)