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Wayfair Surges Post Earnings: ETFs to Play

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Sanghamitra Saha
·3 min read
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The e-commerce company Wayfair W reported third-quarter earnings before market open on Nov 3 that breezed past analysts’ estimates. The Wayfair stock gained about 7.2% on Nov 3. The online retailer of furniture, appliances and home decor products has been a winner of the coronavirus pandemic.

Wayfair came up with quarterly earnings of $2.30 per share, beating the Zacks Consensus Estimate of $0.81 per share. This compares to loss of $2.23 per share a year ago. These figures are adjusted for non-recurring items. The company’s revenues of $3.84 billion trumped $3.69 billion. Total net revenues increased $1.5 billion to $3.8 billion, up 66.5% year over year. Both U.S. and international revenues gained more than 65%.

Orders delivered in the third quarter were 15.8 million, which marked an increase of 72.8% year over year. Repeat customers placed 11.3 million orders in the third quarter of 2020, marking an uptick of 84.4% year over year.

The company indicated that consumers’ loyalty toward the brand is growing. In 2019, about 53% of Wayfair.com orders originated from customers “who had made 3 or more lifetime purchases. In 2015, this figure was about 30%,” per the company.

The company has a Zacks Rank #3 (Hold). The year-over-year sales growth estimate for the year 2020 is 52.73% while the earnings growth estimate is 133.62%. This upbeat outlook of the company makes it important to have a look at the ETFs that have exposure to the company.

ETFs in Focus

Against this backdrop, below we highlight a few ETFs that have exposure to Wayfair. These ETFs may benefit from the potential rally in the Wayfair stock.

Global X E-commerce ETF EBIZ

The fund seeks to invest in companies positioned to benefit from the increased adoption of e-commerce as a distribution model, including companies whose principal business is in operating e-commerce platforms, providing e-commerce software and services, and selling goods and services online. The stock Wayfair makes up about 4.60% of the fund. It charges 50 bps in fees.

ProShares Online Retail ETF ONLN

The ProShares Online Retail Index is a specialized retail index that tracks retailers that principally sell online or through other non-store channels. Wayfair accounts for about 4.76% of the fund, which charges 58 bps in fees.

Amplify Online Retail ETF IBUY

The underlying EQM Online Retail Index utilizes a rules-based methodology to select a globally diverse group of companies with 70% or more of revenues from online and virtual sales. The fund charges 65 bps in fees. Wayfair makes up about 2.80% of the fund.

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Wayfair Inc. (W) : Free Stock Analysis Report
Amplify Online Retail ETF (IBUY): ETF Research Reports
ProShares Online Retail ETF (ONLN): ETF Research Reports
Global X Ecommerce ETF (EBIZ): ETF Research Reports
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