Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Wayfair Jumped Again Today

By John Rosevear - Mar 23, 2020 at 3:46PM

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

Unlike its brick-and-mortar rivals, Wayfair is still open for business.

What happened

Shares of online home-goods retailer Wayfair (W 6.25%) surged on Monday, as investors snapped up shares of battered consumer-durables companies that aren't dependent on brick-and-mortar stores. 

As of 3 p.m. EDT, Wayfair's shares were up about 11% from Friday's closing price.

So what

Until recently, Wayfair was a fast-growing, high-flying (and money-losing) mostly online seller of furniture and home goods. Its once-white-hot stock started cooling dramatically in February as the coronavirus pandemic appeared on more investors' radar. It fell a long way -- and now, investors are moving back in.

A living room mockup filled with Wayfair furniture and home goods.

Image source: Wayfair.

How hot is Wayfair with growth-minded investors? Let's put it this way: In a note on Monday morning, Wells Fargo analyst Zachery Fadem cut his price target for Wayfair from $60 to $38 -- and the stock still jumped over 10% this afternoon.  

It's still way too early to think of this as a recovery, though. As you can see, even with nice gains in the last two sessions, the stock is still way down from the beginning of February.

W Chart

W data by YCharts.

Now what

Wayfair has one retail store (in Massachusetts), but it's mostly an online business. The good news is that it won't have to worry (much) about costs and lost revenue from shuttered brick-and-mortar stores; the not-so-good news is that a deep recession, which seems increasingly likely, will hurt online businesses as well. 

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.
W
$55.48 (6.25%) $3.27

*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
322%
 
S&P 500 Returns
113%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

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.