In an interesting turn of events, online furniture retailer Wayfair (NYSE:W) is planning to open its first physical location. The store will be 150,000 square feet and located in Wilmette, Illinois. However, investors weren’t impressed with the news, as shares fell over 3% in today’s trading.
The move from online to physical stores appears to be a recent trend among e-commerce companies as they look for new ways to grow among growing competition from China and others. It’s also worth noting that e-commerce sales only make up 15% of retail sales in the U.S.
Therefore, even though this presents a large potential runway for growth, it still means that firms that sell exclusively online are missing out on 85% of transactions.
Wayfair Looks to Counter Declining Revenue
It’s no secret that Wayfair made a killing during the pandemic, as everyone was forced to stay at home. However, revenues have since been declining due to a return to normal. Nevertheless, 2024 could be the year that the company makes a return to growth. In fact, website traffic has been trending higher and has grown over 65% year-over-year, as indicated in the image below.
This aligns nicely with analysts’ expectations, who anticipate a 1.3% sales increase for Fiscal Year 2024 and a profitable second quarter at $0.49 per share.
Is Wayfair Stock a Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on Wayfair stock based on 15 Buys, 10 Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After an 86% rally in its share price over the past year, the average Wayfair price target of $70.71 per share implies 2.6% upside potential.
