Bernstein on Wayfair (W): 'Returning to Growth, but Spending More Too'

Bernstein SocGen Group analyst Nikhil Devnani reiterated a Market Perform rating and $45.00 price target on Wayfair (NYSE: W).

The analyst commented: "Returning to growth, but spending more too; Wayfair reported 4Q24 results late last week, showing signs of returning to modest growth, particularly in the US. However, customer acquisition costs (“CAC”) are also climbing. Wayfair has argued that the jump in advertising cost (13.7% of revenue in Q4) is temporary and the investment will pay back in future quarters, but the degree of leverage needs to be proven out. Between advertising costs, Wayfair leaning into take rate, and the potential risk of absorbing tariffs, 2025 could present a tougher set-up for the unit economics, in our view. Nonetheless, Wayfair has committed to EBITDA growth (led by fixed cost efficiencies) and share gain against at a cylical low for the category, which is something to hang onto."

For an analyst ratings summary and ratings history on Wayfair click here. For more ratings news on Wayfair click here.

Shares of Wayfair closed at $41.27 yesterday.

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