Please ensure Javascript is enabled for purposes of website accessibility

Why Wayfair Stock Gained 15% in January

By Demitri Kalogeropoulos - Feb 6, 2018 at 1:47PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Investors are betting the e-commerce upstart had a strong holiday shopping season.

What happened

Home furnishings e-commerce specialist Wayfair (W -9.66%) beat the market last month, rising 15% compared to a 6% increase in the S&P 500, according to data provided by S&P Global Market Intelligence.

^SPX Chart

^SPX data by YCharts

The boost sent shares to new highs, with the stock having gained over 300% since early 2015.

So what

January's rally came as investors grew more confident that Wayfair enjoyed solid sales growth over the critical holiday shopping season. We know, for example, that revenue spiked by 53% during the five-day weekend period following Thanksgiving. That demand bounce was powered by thousands of orders for bulky merchandise, Wayfair said, including pool tables, hot tubs, and even a single 3,900-pound delivery of a storage shed.

A customer enters his credit card information in a laptop.

Image source: Getty Images.

Rival reported booming sales for the quarter, too. It sold 35% more products this past holiday season, despite its already massive revenue base.

Now what

It's good news for the business that customers are getting comfortable with shopping for their home furnishings, including things like sofas and dining tables, online. But investors will find out whether Wayfair was able to deliver these products efficiently, and at a profit, when it announces its full fourth-quarter results on Thursday, Feb. 22.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wayfair Inc. Stock Quote
Wayfair Inc.
$50.32 (-9.66%) $-5.38

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/28/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.