Baird Remains Sidelined on Wayfair (W) Following 1Q Revenue Beat
Baird maintained a Neutral rating and $50.00 price target on Wayfair (NYSE: W) following the company's 1Q earnings report. Wayfair reported revenues of $747M, ahead of the consensus estimates of $695M and guidance of $600-$700M. The beat was driven by ongoing Direct segment growth in repeat orders and new customers. EBITDA and EPS were in-line/slightly below consensus expectations, with ad spend elevated internationally in addition to ongoing platform investments and new headcount.
Analyst Colin Sebastian commented, "Wayfair reported Q1 revenues well ahead of expectations ($747M vs. $695M consensus), driven by ongoing Direct segment growth in repeat orders and new customers, as Wayfair continues to carve-out impressive retail share gains in Home categories. Adjusted EBITDA margin of -2.9% was in line, as revenue upside was largely offset by elevated international ad spend/opex. Maintain Neutral rating, but continue with a positive bias as we await more clarity on normalized margins."
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Shares of Wayfair closed at $35.99 yesterday.