The brokerage, in a report to clients, highlighted the "yellow flags" of "gross and net customer adds, customer acquisition costs and orders per customer," as well as increased pressure from "softer category sales trends in December" and supply chain headwinds.
"Those yellow flags have become red flags for many investors, contributing to [Wayfair] shares declining -27% since 3Q21 results vs. -6% for the Russell 2000," Wedbush retail analyst Seth Basham said in Wednesday's note.
Furthermore, "[t]he fact that orders per customer continue to trend below 2019 levels (and should be flattish vs. 2019 for full-year 2021) strikes at the core of [Wayfair's] strategy."
Wedbush lowered its price target on the stock to $160 from $290.
Wayfair has an average rating of hold and price targets ranging from $120 to $395, according to analysts polled by Capital IQ. The stock closed almost 5% lower at $186.28 on Tuesday and opened Wednesday's regular session another 5% lower.
(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)
Price: 179.25, Change: -7.03, Percent Change: -3.77
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