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Sunday, November 24, 2024

Top Trades for Thu, 25 Feb 2021 10:19 – W (Short)

  • Wayfair (NYSE:W) is now higher in premarket trading after an early decline following the Q4 earnings report.
  • During the earnings call, Wayfair management stated quarter-to-date revenue is trending at a mid 50% pace to mark an acceleration from the 45% growth in Q4. The consensus estimate for Q1 revenue growth is +43%.
  • Shares of Wayfair are up 2.55% to $264.53. Wayfair was down 7% about an hour ago.

See, there's a good example.  W is a FURNITURE store.  Due to the pandemic and people's inability to go shopping and W being big on-line, they got a nice bump in 2020 from $9.1Bn to $14.2Bn in sales - very impressive.  "Profits" on the other hand, $500M and this is the first time they've ever made a profit and guidance for this year is $250M yet the stock has gone from $150 to $300, which is $25Bn in market cap or 50 times best earnings.  

Year End 31st Dec 2014 2015 2016 2017 2018 2019 TTM 2020E 2021E CAGR / Avg
Total Revenue
$m
1,319 2,250 3,380 4,721 6,779 9,127 13,008 14,219 16,009 47.2%
Operating Profit
$m
-148 -81.3 -196 -235 -473 -930 -45.6      
Net Profit
$m
-148 -77.4 -194 -245 -504 -985 -169 486 250  
EPS Reported
$
-2.97 -0.925 -2.29 -1.99 -5.63 -10.7 -2.73      
EPS Normalised
$
-2.97 -0.925 -2.29 -1.91 -5.64 -10.7 -2.70 4.44 2.40  
EPS Growth
%
                -46.0  
PE Ratio
x
              58.2 108  
PEG
 
                1.38  
Profitability

There is no possible way they can repeat this growth and it's very unlikely they can even sustain what they have once things get back to normal. 

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