In a report published Thursday, Stifel analyst Scott Devitt initiated coverage on Wayfair Inc W with a Hold rating.
In the report, Stifel noted, “We are initiating coverage of Wayfair Inc. with a Hold rating on the shares and $24 fair value estimate. Wayfair is an asset-light platform with superior operational and logistics capabilities. We believe the company has an attractive long-term opportunity, as a niche pure play eCommerce operator to grow market share in the fragmented home furnishings sector. We expect Wayfair to incur operating losses through 2016 as a result of the company's sizable investment in sales and marketing despite our expectation of revenue growth well ahead of the home furnishings sector and overall eCommerce. As investors continue to penalize small capitalization internet names lacking profitability, we believe multiple expansion for Wayfair shares will be limited until there is greater visibility in the path to profitability.”
Wayfair closed on Wednesday at $22.60.
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