Wayfair Analysts Assess Q4: Ad Spend Weighs On Earnings, Market Share Grows

Shares of Wayfair Inc W fell Friday morning, despite the company reporting a Q4 revenue beat on Thursday.

The results came in amid an exciting earnings season. Here are some key analyst takeaways.

Stifel On Wayfair

Analyst Mark Kelley reaffirmed a Hold rating, while cutting the price target from $47 to $46.

Wayfair reported net revenue of $3.12 billion, which was flat year-on-year but beat Street expectations of $3.07 billion, Kelley said in a note. Active customers of 21.4 million came in below consensus of 22.2 million, while adjusted EBITDA of $96.0 million missed consensus of $105.1 million, he added.

The earnings miss was due to ad spend being higher than in the previous quarter, the analyst stated. "1Q revenue guidance was slightly better than expected and EBITDA margin expectations were essentially in line at the midpoint," he further wrote.

Raymond James On Wayfair

Analyst Bobby Griffin maintained a Strong Buy rating and price target of $60.

Wayfair's adjusted EBITDA missed consensus by around $10 million, with margins of 3.1% coming in lower than expectations of 3.5%, Griffin said. The company continued to gain market share during the quarter and recorded 48% EBITDA growth and positive free cash flows in 2024, he added.

"Management expects 1Q25 sales flat to down y/y (100 bp drag from the exit of Germany business)," the analyst wrote. The company guided to first-quarter adjusted EBITDA margins of 2%-4%, versus consensus of 3.1%, he further stated.

Check out other analyst stock ratings.

Needham On Wayfair

Analyst Bernie McTernan reiterated a Buy rating and price target of $50.

Wayfair continues to face a challenging macro environment, with elevated mortgage rates unlikely to provide an opportunity for a cyclical recovery in the home furniture market in 2025, McTernan said. Although he noted that the company's U.S. revenues grew in the fourth quarter, "which is an encouraging data point and speaks to their ability to continue to drive share gains."

Wayfair continues to exhibit financial discipline as it waits for the macro to recover, the analyst stated. The company is "an under the radar beneficiary of a housing market recovery," he further wrote.

Piper Sandler On Wayfair

Analyst Peter Keith maintained an Overweight rating and price target of $58.

Wayfair delivered a sales beat but its EBITDA missed expectations on higher advertising spend, Keith said. The company spent more on influencer advertising, which it expects will yield benefits in the next couple of quarters, he added.

Management guided to a first-quarter adjusted EBITDA margin of 2%-4%, which at the midpoint slightly misses the consensus expectation of 3.1%, the analyst stated. "We believe Wayfair continues to take modest market share, and expand EBITDA margin, both of which should accelerate with industry growth," he wrote.

W Price Action: Shares of Wayfairhad were down 5.9% to $43.28 at the time of publication on Friday.

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