Summary: OVERPRICED
Score: 4/20
MOS: 0%
Share Price: $274
Sticker Price: $0
Is Wayfair a good buy?
Wayfair is an 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, MA and has offices and warehouses throughout the United States as well as in Canada, Germany, Ireland, and the United Kingdom.
Wayfair is typically a popular stock as it’s often reported in the news. Their revenues increased by 67% this year and the stock is already up 214% percent for the year. The stock growth rate is higher than a lot of tech stocks, which is out of the ordinary.
What caused this?
Due to COVID-19, a lot of people are stuck working from home and in general, spending more time at home. This has triggered an increase in do-it-yourself projects which have positively impacted companies like Home Depot and Lowe’s. This has also caused more people to upgrade their furniture and home decor by spending more money at retailers including Wayfair.
This is great for Wayfair but is this stock a good buy?
This article from Forbes states exactly what Tykr has revealed. “Wayfair is furnishing Investors with Risk.”
As stated by Forbes, “Investors who think that such extraordinary performance in the stock coincides with accelerating revenue growth, progress towards profitability, or growing competitive advantages are wrong. While Wayfair’s stock performance is attractive to many momentum investors, investors with fiduciary responsibilities should consider the deteriorating fundamentals, weak prospects to achieve profitability, and the unrealistic increase in profits implied by the current valuation.”
With a score of 4/20, the financials are very weak. Within a MOS of 0% (Share Price of $274 vs Sticker Price of $0) this stock could be on a sharp nose dive to the bottom very soon. If you own Wayfair, now might be the right time to sell before it falls.
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