|Bid||145.21 x 1100|
|Ask||146.05 x 800|
|Day's Range||143.45 - 146.94|
|52 Week Range||60.53 - 173.72|
|Beta (3Y Monthly)||2.95|
|PE Ratio (TTM)||N/A|
|Earnings Date||May 2, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||159.48|
Jim Cramer breaks down Restoration Hardware's fundamentals to explain why he likes the stock's risk-reward after the company cut its guidance.
Wayfair is opening its first full-service physical retail store. The new store, located in Natick, Massachusetts will bring Wayair’s large variety of home goods into the brick and mortar space. Yahoo Finance's Jen Rogers, Myles Udland, Brian Sozzi and Brian Cheung discuss.
Expands Unparalleled Offering of Fine Furniture and Décor Conveniently Available Through Trusted Online Destination
From one perspective, Wayfair (NYSE:W) is being treated like most tech stocks. Wayfair stock has a market capitalization of nearly $14 billion despite the fact that Wayfair is unprofitable, even on an adjusted EBITDA basis.Source: Shutterstock From another perspective, however, Wayfair stock price might be considered cheap: its price-sales multiple of two is among the lowest of all 'tech' stocks. * 7 Dental Stocks to Buy That Will Make You Smile The argument over Wayfair stock price, then, seems to come down to whether it truly is a "tech" stock. Certainly, the company's online business model seems to suggest that it is.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut, at the end of the day, there's also an argument that Wayfair is simply a furniture company that sells its products online. If that's the case, then W stock might be significantly overvalued because furniture companies are not getting much credit in this market. The Cyclical Problem Facing W StockOne of the more favorable aspects of many newer tech stocks with high valuations is that their exposure to economic cycles shouldn't be that severe. The revenue of a "software-as-a-service stock" like Salesforce.com (NYSE:CRM), for instance, should stay reasonably steady even as the economy ebbs and flows.A company might cut a few SaaS licenses if it lays off sales staff. But customers of Salesforce.com or Workday (NASDAQ:WDAY) or even the cloud unit of Amazon.com (NASDAQ:AMZN) aren't going to end their contracts in the middle of a recession.Even some consumer plays - think Netflix (NASDAQ:NFLX) or Spotify (NYSE:SPOT) - should be similarly resilient. As Josh Enomoto pointed out late last year, Netflix might even be counter-cyclical; consumers might eliminate their more expensive cable subscriptions, accelerating the shift to Netflix's streaming services.That is clearly not the case with Wayfair. The furniture business in particular is enormously cyclical. So, too, are many of the company's other key categories, like decor and appliances. And the obvious risk facing Wayfair stock is that the U.S. is in the tenth year of an economic expansion. Wayfair's growth has been impressive over that stretch, but what happens when the economy inevitably slows down? Should the Wayfair Stock Price Be This High?The price of Wayfair stock might not seem like a concern right now, particularly as stock markets look poised to re-take their all-time highs. But the fact is that other similar, albeit mostly brick-and-mortar, companies, already are pricing in the risk of a recession.Most furniture retailers and manufacturers trade in the range of 10 times to 12 times their earnings. La-Z-Boy (NYSE:LZB) might be the most expensive of the group; backing out net cash, it trades at about 14 tines its earnings, as does volatile RH (NYSE:RH).Home-decor retailers have been hammered. Bed Bath & Beyond (NASDAQ:BBBY), Tuesday Morning (NASDAQ:TUES), and Pier 1 Imports (NYSE:PIR) all are struggling. Williams-Sonoma (NYSE:WSM) is holding up better, but it still has traded sideways for over three years now.Cyclical fears aren't the only factor holding many of those stocks down. In fact, they likely aren't the biggest factor behind their weakness. Wayfair's impressive top-line growth, and share gains by Amazon and other online retailers, are key reasons why stocks in the furniture-retail sector have struggled. But even growing companies like RH and La-Z-Boy are being valued cheaply.And taking a broader look, most cyclicals - auto manufacturers, boating plays, equipment stocks like Caterpillar (NYSE:CAT) - are being valued as if the end of the cycle is closer than the beginning. A decade into an upcycle, that's not surprising. What is surprising, perhaps, is that W stock doesn't seem to be getting the same treatment. Be Careful Out ThereThe core argument around Wayfair stock really comes down to whether Wayfair's market is viable. Its revenue growth has been impressive,. But those who are bearish on Wayfair stock argue that the company's higher sales simply are being purchased by huge advertising costs and free shipping.The jury's still out on that debate. But the cyclical aspect of the business has to be a concern. When the economy turns, Wayfair likely is going to take a hit. That, in turn, means it has to convince investors of the validity of its business model before that happens.If the market thinks Wayfair will be a dominant retailer for decades to come, Wayfair stock can ride out temporary weakness by the company. If the battle over Wayfair's outlook is still raging, and the economy turns south, however, W stock is going to plummet.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post The One Big Catch With Wayfair Stock appeared first on InvestorPlace.
[Editor's note: This story was previously published in March 2019. It has been updated and republished.]If you're looking for consistent market success, the best thing you can do is to expand your time horizon. Chasing flavors of the week could profit you in the immediate frame, but too often, an unexpected event can derail your position. However, by picking ideas from the best long-term stocks, you improve your odds significantly.Primarily, a financially sound company's trading dynamics will replicate the law of averages. Nearer-term pressures and unfavorable news events can negatively impact the organization, but in the longer run, the fundamentals take over. In other words, time evens out the volatility. That's not the case for swing trades, where outliers can have a disproportionate effect.InvestorPlace - Stock Market News, Stock Advice & Trading TipsMoreover, genuine long-term stocks usually have bullish arguments that extend beyond technical factors. A proven track record is a typically common attribute, as are other tailwinds, such as strong financial performances, or a robust, underlying industry.To better maximize these "patient" investments, investors should focus not just on corporate-growth prospects, but sector growth as well. In many cases, a rising tide lifts all boats, irrespective of individual performance. * 7 Mid-Cap Stocks to Find the Market's Sweet Spot To that end, I present my top seven stocks to buy for the long haul: Wayfair (W)Some trends are significant but difficult to quantify. Others are patently obvious. A prime example is shifting consumer behavior toward e-commerce outlets. Put simply, online sales represent an increasing share of total retail sales. This undeniable fact has always led me to recommend a longer-term position in Amazon (NASDAQ:AMZN).I'm not backing away from that opinion. Amazon attracts all customers, but notably those in the middle-income bracket. It's also pushing into extremely lucrative markets like smart speakers. Its role in the economies of tomorrow is assured. But I don't want to keep talking about the same company again . That's why I'm putting Wayfair (NYSE:W) front and center on my long-term stocks to buy list.Wayfair is an online retailer specializing in home goods such as furniture and decorative products. And business has been good, with W generating nearly 45% direct-retail sales growth last year.The tremendous momentum has sparked a rapid rise in W stock. Since June 1, 2017, Wayfair stock has nearly doubled.The problem? Its net income is negative. Coincidentally, that's always been Amazon's issue until a few years ago. So long as shareholders continue to see top-line growth, they appear willing to overlook the bottom line.Over time, Wayfair could end up becoming a smaller version of Amazon, which isn't a bad gig. FedEx (FDX)Being as diplomatic as possible, the Trump administration has been a mixed blessing for the economy. On one hand, Trump has reinvigorated domestic industries, with calls about putting American interests first. But on the other hand, he hasn't produced a great image abroad in the non-Russian part of the world.A sharp consequence of Trump's foreign policy is the ongoing tariff wars with China. With the Asian economic giant being an exporting power, international couriers like FedEx (NYSE:FDX) felt the heat. As an example, FedEx delivered great results for its fourth-quarter fiscal 2018 earnings report. Unfortunately, investors panicked on FDX stock due to shipment-slowdown fears.That's a shame because I strongly view FedEx as one of the best long-term stocks to buy. Outside of the tariff issue, the courier, along with rival United Parcel Service (NYSE:UPS), benefits from the aforementioned e-commerce trend. Consumers are no longer shopping in brick-and-mortar stores in the same volume like prior generations. The positive tailwind for both couriers is readily apparent. * 7 Mid-Cap Stocks to Find the Market's Sweet Spot Critics may counter that Amazon is experimenting on their own delivery service. I've said it before, and I'll say it again: the impact is likely overstated. The economies of scale involved in trying to take down a FedEx or UPS is enormous. Besides, the e-commerce sector will balloon to a size big enough for all current competitors. Welltower (WELL)You hardly think about this when you're younger. But as the earth continues to revolve around the sun, you get closer to the inevitability of old age. After enough complete revolutions, you're at a point where you may no longer physically take care of yourself.Handling the challenges in senior-living solutions is Welltower (NYSE:WELL). Welltower is a real-estate investment trust that focuses largely on senior-housing and assisted-living facilities. The company also specializes in memory-care communities, post-acute care facilities and medical-office properties.The need for Welltower's primary business is obvious. Currently, Baby Boomers represent the largest living generation in the U.S. A significant number of this demographic are already retirement age, and soon, the majority will enter their golden years. That substantially boosts prospects for WELL stock, especially if you have a long-term strategy.Moreover, I believe Welltower's structure as a REIT is an advantage in this sector. Direct plays like Brookdale Senior Living (NYSE:BKD) appear enticing at first. However, look deeper at the financials, and you'll likely discover a flawed opportunity. Welltower better absorbs sector risk by spreading it across multiple properties. Rosetta Stone (RST)I dare say that most Americans take for granted that English is the uncontested international language. Everything that we consume has an English translation. Whenever we go to a foreign country, we can expect at least someone to speak some English.We really don't think twice about this dynamic because of historical imperialism. Western values and culture are exported everywhere thanks to ubiquitous brands like Coca-Cola (NYSE:KO) and McDonald's (NYSE:MCD). But how long is this dynamic going to last? Even in our own nation, we're experiencing profound demographic shifts.Internationally, these changes are even more dramatic. Already, Chinese is the most spoken language in the world. Considering that China's population is roughly 1.4 billion, this fact will become further solidified.Here's the bottom line: Whether English remains the international standard, America cannot survive as a monoglot nation. That's where Rosetta Stone (NYSE:RST) comes in. As makers of language-education software, RST provides a critical solution to a growing need.RST has proven its worth in the markets, having jumped to a 35% lead. Still, it will require some patience moving forward. The company incurred poor sales and earnings performances in the era of Google Translate. * 7 Mid-Cap Stocks to Find the Market's Sweet Spot However, learning languages isn't about merely translating words, but the meaning behind the words. Foreign language is a vital art that computers can't yet properly duplicate. If Rosetta Stone can sell that message, RST has the chance to consistently surprise. Carvana (CVNA)The previous time I covered online car dealer Carvana (NYSE:CVNA) was as part of a gallery featuring up-and-coming publicly traded organizations. I also mentioned that I was in the market for a new ride. I'm still searching, which has led me to some additional thoughts about CVNA stock.First, car buying is a real pain in the behind. I spend endless hours looking for the right vehicle. If I find a few that meet my interests, I then have to physically go to the dealership. I haven't gotten around to this step because a) I'm lazy and b) I know I'm in for bitter negotiations.That, of course, is just my personal feelings on the matter … but I'm not the only one that feels this way. According to Time.com contributor Ian Salisbury:"It's long been a rite of passage -- if one that's universally bemoaned -- sitting at a car dealer's cluttered desk, dickering over the price of a new vehicle.But millennials -- used to purchasing everything from music to groceries to hotel stays online -- are starting to change that as a number of major care markers strike deals to sell cars at fixed list prices, according to a report in the Washington Post."This year, more millennials will be in America than members of any other generation. If millennials buy cars, they will increasingly choose the online route. Sorry, shady used-car dealers, but CVNA is about to eat your lunch. 51job (JOBS)Rooster's Lindsey Kline reported that millennials are giving corporate America the bird. But why do Kline and her fellow demographic partners feel so strongly about corporate employment? In her words, she prefers companies cut the BS, and instead provide "office kegs, pool tables, and air hockey." If today's employers can't get with the program, young workers will simply leave.Kline justifies this prideful attitude in that "Millennials are the most educated generation in history. We grew up in the midst of a digital era, and consequently, we're the only generation that doesn't have to adapt to new technologies."Some of you might find this thinking process arrogant, and I would agree. However, don't fight the tape: This is how the working environment works today. And this points to the reason why I'm long-term bullish on ShiftPixy (NASDAQ:PIXY), especially if the price is right. * 7 Mid-Cap Stocks to Find the Market's Sweet Spot However, this trend isn't exclusively an American one, which is why I'm putting 51job (NASDAQ:JOBS) on my long-term stocks to buy list. 51job is a next-generation employment recruiter and human-resources solutions provider for the young and tech-savvy. Better yet, it's a Chinese company that levers the advantages of a labor force that is over twice the size of the total U.S. population! That's a figure you simply can't ignore. Albemarle (ALB)A few years ago, Goldman Sachs boldly stated that lithium is the new gasoline. Most insiders, though, would probably say that the vaunted financial firm is merely profiting from the obvious. Companies like Tesla (NASDAQ:TSLA) have long proven that lithium is indeed the next-gen fuel source.But try telling that to the markets. Tesla stock is down nearly 12% over the past year, and the lone lithium-based exchange-traded fund, Global X Lithium ETF (NYSEARCA:LIT), is down sharply this past year. Fortunately, so too is domestic-lithium specialist Albemarle (NYSE:ALB).So what's causing this prolonged downfall? While lithium demand is higher, so too is supply. Indeed, as the lithium price soared, more producers wanted in on the action. As a result, Argentina, Australia and Chile have ramped-up production to the point where supply greatly exceeds demand. From Economics 101, you know where that situation leads.But like any commodity, the ebb-and-flow is difficult to predict. Sure, oversupply exists today. Tomorrow, that situation can change on a dime. Given that the broader technology industry points toward increased lithium usage, not less, my money is on ALB rising. Consider this lull in Albemarle shares as a discounted opportunity on one of the best long-term stocks to buy.As of this writing, Josh Enomoto did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Internet Stocks to Watch * 7 AI Stocks to Watch with Strong Long-Term Narratives * 10 Dow Jones Stocks Holding the Blue Chip Index Back Compare Brokers The post The 7 Best Long-Term Stocks for 2019 And Beyond appeared first on InvestorPlace.
Investing in hedge funds can bring large profits, but it’s not for everybody, since hedge funds are available only for high-net-worth individuals. They generate significant returns for investors to justify their large fees and they allocate a lot of time and employ a complex analysis to determine the best stocks to invest in. A particularly […]
In a second-annual event, online home-decor retailer Wayfair Inc. is offering its lowest prices of the year starting at noon New York time. Sales could be notably better than last year, according to Piper Jaffray analyst Peter Keith, who rates the shares overweight. Wayfair and Amazon.com Inc. are the two largest online home furnishing marketplaces, Keith said.
Wayfair Inc. (NYSE:W), one of the world’s largest online destinations for the home, announced that Way Day officially kicks off today at 12 p.m. ET/9 a.m. PT. For a full 36 hours, shoppers can take advantage of Black Friday-low prices on thousands of popular home furnishings, décor, housewares and home improvement products as well as free shipping. On Way Day, we’re bringing this unrivaled experience to a new level, offering the steepest discounts possible on the products our customers love at a time of year when home is top of mind,” noted Steve Oblak, chief merchandising officer, Wayfair.
NEW YORK, NY / ACCESSWIRE / April 5, 2019 / The following statement is being issued by Levi & Korsinsky, LLP: Levi & Korsinsky, LLP announces that investigations have commenced on behalf of shareholders ...
For Macy's (NYSE:M) stock, the past five years have been painful.Source: Shutterstock The brick-and-mortar retail giant has been consistently pressured by growing threats in the digital channel, the sum of which have stolen its market share, put the brakes on its revenue growth, and pulled down its profit margins. * 7 Biometric Stocks to Watch as AI Rises There was a glimmer of hope of a turnaround in late 2017 and early 2018 as the company's numbers started to improve. That improvement didn't last. The numbers reversed course. So did Macy's stock price, which is now just a few points north of its five-year lows.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut not all is lost for Macy's and Macy's stock. There are broad signs out there that the brick-and-mortar retail world is stabilizing, and that the digital retail world is democratizing. Both of those trends imply healthier numbers for Macy's going forward.Plus, the U.S. economy appears to be finding its footing after its slowdown in late 2018. This re-acceleration of economic expansion and consumer confidence should provide a tailwind for Macy's growth in 2019.Most importantly, Macy's stock is dirt cheap. The forward price-earnings multiple of Macy's stock sits below 8, and its dividend yield is north of 6%.With improvements on the horizon, and Macy's stock price sitting at dirt-cheap valuation levels, now actually seems like a good time to get bullish on Macy's stock. I think that Macy's stock price can reach $30 by the end of the year, implying 20%-plus upside over the next eight months. The Consensus View Is BearishThe consensus view on Macy's is pretty simple.According to the consensus outlook, the digital-retail channel continues to steal share from the brick-and-mortar retail channel, and within the brick-and-mortar retail channel, Macy's isn't a highly distinguished player.As a result, Macy's physical stores won't stage a big comeback anytime soon. Meanwhile, Macy's continues to struggle in the digital channel, and without robust digital growth, Macy's overall revenue growth trajectory will be flattish over the next several years.Meanwhile, according to the Street's consensus outlook, Macy's gross margins will continue to come under price pressure from e-commerce players, while its wage costs will rise and its revenue will remain flat. Furthermore, the company's profit margins will compress, and its profits will drop.That's why analysts' consensus-earnings-per-share estimates for Macy's stand at $3.10 for 2019, $2.95 for 2020, and $2.70 for 2021. The Street Shouldn't Be So Bearish on Macy's StockThis consensus view, however, feels overly pessimistic to me.Although the digital channel continues to steal share from the brick-and-mortar channel, digital-retail-sales growth is slowing. For the past several years, e-commerce sales growth in the U.S. has consistently run around 14%-16%. But, in 2018, that growth meaningful slowed for the first time, reaching 12% by the end of the year. Not by coincidence, most retailers also reported better in-store numbers in 2018, too.Further, while Macy's digital business isn't growing as fast as bulls would like it to, it is still growing at a strong, double-digit percentage pace. Meanwhile, e-retail behemoth Amazon (NASDAQ:AMZN) has seen its e-commerce business slow meaningfully, against the backdrop of the red-hot e-commerce businesses at Target (NYSE:TGT) and Walmart (NYSE:WMT). Thus, the digital-retail world is democratizing. That's a positive sign for M stock.On the margin front, gross margins were hit hard in the second half of 2018. But that's mostly a function of inventory clearing, and at the end of 2018, Macy's comparable inventory was down year-over-year. Thus, its gross margins should move higher in 2019. Also, Macy's wage expenses will continue to rise, but it's fairly reasonable to assume that its wage increases will be offset by revenue growth as the retail world stabilizes.All in all, the consensus' belief that profits will keep dropping at Macy's over the next several years seems overly pessimistic. Instead, I think the company's revenues will be stable, and its margins will stabilize, leading to mild profit growth. If that happens, then Macy's stock price can rise tremendously from its current levels. Fundamentals Imply That Macy's Stock Price Can Rise MeaningfullyThe math is simple.Macy's revenue is expected to be roughly $25 billion this year. Assuming some combination of flattish in-store performance and double-digit digital-sales growth, Macy's should be able to increase its top line at a 0%-1% rate over the next several years.Meanwhile, its 2018 gross margins came in narrowly above 39%, and should be stable going forward because its inventory and competition difficulties have eased. The company's operating-spending rates are climbing, but should stabilize as inflation remains muted.All together, Macy's top line looks poised to increase very slowly, while its margins should be stable. Assuming the company continues to buy back Macy's stock, its earnings per share should increase slowly . I see EPS of $3.50 as doable by fiscal 2025.Based on Macy's longtime average forward price-earnings multiple of 11, that equates to a fiscal 2024 price target of $38.50. Discounted back by 5% per year (below my normal 10% discount rate to account for the yield), that implies a fiscal 2019 price target for Macy's stock of just over $30. The Bottom Line on M StockMacy's stock isn't a big winner. It's currently facing fundamental challenges which will keep its profit growth depressed for the foreseeable future. But the consensus view on Macy's stock is far too pessimistic, and that has left M stock unreasonably undervalued. As a result, this seems like an opportunity to buy Macy's stock on weakness.As of this writing, Luke Lango was long M, AMZN, and TGT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 5 Low-Priced Tech Stocks With Great Potential * 9 Stocks That Would Be Hurt By a Mexico/U.S. Border Closure * The Era of Car Ownership Is Over. And These 4 Charts Prove It Compare Brokers The post Macy's Stock Looks Like It Can Rally Back to $30 appeared first on InvestorPlace.
Wayfair Inc. , one of the world’s largest online destinations for the home, today announced that it will release financial results for its first quarter ended March 31, 2019 before the opening of the market on May 2, 2019.
Wayfair Inc. (NYSE:W), one of the world’s largest online destinations for the home, today announced that Way Day 2019 will kick off on April 10 at 12 p.m. ET/9 a.m. PT. Following Way Day’s successful debut last April, this year, Wayfair’s popular retail holiday for home will be extended to 36 hours and to all customers in North America, the UK and Germany with steep savings across Wayfair, AllModern, Joss & Main and Birch Lane. “This Way Day, we are making the celebration even bigger and better than last year with more flash deals and steeper discounts across an even broader selection of products and services – all for an extended period of time,” said Steve Oblak, chief merchandising officer, Wayfair.
In the stock market, a truth about volatility is that it always comes back. It's sometimes easy to forget this when you've found a winning stock that's firing on all cylinders. That winning stock could easily rise 50%, 75%, or even 100%-plus in a hurry, and do so in linear fashion. The another truth, though, is that even the best stocks don't go up in straight lines forever. Even seemingly invincible stocks hit rough patches every once in a while, and when they do, the stocks will struggle to head higher.Case in point: Wayfair (NYSE:W). The furniture e-retailer is firing on all cylinders, and has distinguished itself as the leader in the U.S. e-commerce furniture market. They are also seeing tremendous success internationally, and margins are making some progress toward their healthy long-term goals. As such, W stock has been absolutely on fire. Year-to-date, it's up 65%.But, this seems like a case of a winning stock heading into a rough patch.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo be sure, Wayfair stock has all the attributes of a long-term winner. The company has distinct advantages in a secular growth market powered by healthy demand tailwinds, and has established an early and consistent leadership position on that secular landscape. Margins also have a pathway to head meaningfully higher in the long run. Wayfair looks like a big revenue and profit grower for the next several years, the sum of which will drive W stock higher. * The Elite 8 Stocks to Buy for Massive Outperformance Having said that, Wayfair stock has come very far, very fast, and the valuation is now fundamentally challenged. As such, I think patience is key here. Don't chase the rally. But, be prepared to buy the dip. Wayfair is a Long-Term WinnerIn the big picture, Wayfair is a long-term winner for three big reasons. Those three big reasons are as follows: * The right market: The global furniture market is a steady low-single-digit growth market supported by stable demand drivers such as consumers moving into new homes and/or remodeling existing homes. Within that industry, we are now seeing a massive pivot toward the online channel, and according to Wayfair numbers, e-commerce penetration in the U.S. home market has consistently increased. But, it's still at just 13%, versus ~30% for apparel. Further, the new buyers in this industry are millennial first-time home buyers who want to buy things online. Thus, the runway for growth in the online home market is huge, and supported by strong demand tailwinds. * Early and consistent leadership: Within the e-retail furniture market, Wayfair has established itself as the leader. The company's share of U.S. e-retail furniture sales has risen from just over 10% in 2015, to more than 15% last year. Further, of the $4.8 billion in new online furniture sales generated in 2018, roughly a third was from Wayfair. So, this company has an early leadership in the secular growth online furniture market, and is rapidly expanding that leadership position. * Profit ramp potential: The big knock against Wayfair is that company runs steep losses. But, so did Amazon (NASDAQ:AMZN) once (or twice, or…) upon a time. Now, Amazon's profit margins are in the low to mid single-digit range, and expanding rapidly. This is the benefit of scale in the e-commerce world. Wayfair's margins should follow a similar trajectory as Amazon. Gross margins are high enough (above 24%) that as revenue scale drives opex leverage, then margins will zoom into positive territory, and profits will soar.All in all, Wayfair has all the right attributes to support a healthy long term growth narrative. As such, so long as management continues to execute, Wayfair stock should stay on a long term uptrend. Beware Near-Term TurbulenceThe problem with Wayfair stock here is that current levels don't seem sustainable in the near to medium term.Namely, the valuation is rich. When it comes to W stock, you can't really look at the current multiples and say anything about the valuation. Instead, you have to look at potential profits down the road, and see how the current valuation stacks up against those profits. When you do that, it becomes pretty clear that Wayfair stock is pushing the limits of its present day valuation.At scale, I have a bullish outlook on Wayfair's growth trajectory. I think:* The U.S. home market will continue to grow at a steady low to mid single-growth rate for the foreseeable future.* E-retail share in the U.S. e-commerce market will hit nearly 50% by 2030.* Wayfair will grow e-retail U.S. market share to 30%-plus by 2030.* The international retail business can continue to grow at a robust rate and hit 10% penetration of its $300 billion addressable market by 2030.* Gross margins will run towards 25%, while the opex rate will drop towards 20%.Even under those bullish assumptions, I still think Wayfair stock is fundamentally stretched here. Earnings per share of $20 seems doable by fiscal 2030. Based on a growth average 20x forward multiple, that implies a reasonable fiscal 2029 price target for W stock of $400. Discounted back by 10% per year, that equates to a fiscal 2019 price target roughly $155. * 10 Tech Stocks That Transformed Their Business That's about where the stock trades today. As such, long-term fundamentals say Wayfair stock is fully valued here. Bottom Line on W StockWayfair stock is a long-term winner that sprinted ahead of the fundamentals in the near term. As such, the next few months should be defined by sideways trading and not much sustainable upward progress in the stock.As of this writing, Luke Lango was long AMZN. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Transformed Their Business * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos * 7 Weak Blue-Chip Stocks to Trim Immediately Compare Brokers The post Wayfair Stock Is A Winner That's Due For Some Near-Term Turbulence appeared first on InvestorPlace.
The stock market is up big in 2019. The global economy has shown signs of stabilizing and improving. Trade and FX (foreign exchange) headwinds have become less severe. Corporate earnings have continued to be largely better than expected. All in all, things are simply getting better, economically speaking, and that has paved the path for a global financial market rally.Leading the 2019 stock market rally have been growth stocks. In short, as confidence has returned to financial markets, it has returned doubly so to growth stocks. There is nothing unusual about this. When times are good, growth stocks outperform, since there is clarity with respect to their growth outlooks. When times are bad, growth stocks under-perform, since there is a lack of clarity on the growth front.But, the peculiar thing about the 2019 stock market rally is that there has been an unusually large number of breakout stocks in the growth category which have staged jaw-dropping year-to-date rallies. Usually, you get a handful of breakout stocks that double in three months. This year, there are dozens of stocks that have risen 60%, 80% and even 100%-plus over the past three months.InvestorPlace - Stock Market News, Stock Advice & Trading TipsNot all of these breakout stocks will continue to be shining stars. But some will, and it's important to know the difference as volatility creeps back into financial markets over the next several months (thanks, inverted yield curve). * The Elite 8 Stocks to Buy for Massive Outperformance With that in mind, let's take a look a seven breakout stocks of 2019 which deserve your attention. Breakout Stocks of 2019: Wayfair (W)Source: Shutterstock YTD Gain: 64%How It Got Here: Furniture e-retailer Wayfair (NYSE:W) has been in rally mode for all of 2019, mostly because the company has continued to report robust numbers which underscore the stock's long term bull thesis. Specifically, every important metric continues to trend up with great pace (active customers, revenue per active customer, customer retention, new customer order rate, international revenue growth, so on and so forth), and this gives credibility to the thesis that Wayfair continues to emerge as the leader in the rapidly growing online furniture market.Where It's Going Next: Wayfair stock may run into some turbulence here. The stock is a long-term winner, mostly because management continues to make all the right moves to grow the company's market share and leadership position in the secular growth online furniture market, which has plenty of room to grow given still-low online furniture penetration rates. Margins have a long runway for improvement, too. But the stock has come very far, very fast, and is now trading at valuation levels which are too perfect for a company that has plenty of exposure to a slowing housing market. Chipotle (CMG)Source: Shutterstock YTD Gain: 66%How It Got Here: Everyone loves a good turnaround story, and fast casual Mexican eatery Chipotle (NYSE:CMG) is giving investors just that. New management came in about a year ago. Ever since, the company has executed flawlessly, refreshing the menu with unique offerings, expanding the digital business and re-branding through innovative marketing campaigns. The numbers have improved dramatically as a result, and CMG stock has rallied in a big way.Where It's Going Next: At the current moment, CMG stock is just about the most expensive restaurant stock I have ever seen. To be sure, some of this valuation premium is warranted -- comparable sales growth trends look good, the unit growth runway is big and margins have room for improvement. * 10 Tech Stocks That Transformed Their Business But, the U.S. economy is slowing, and there's also adverse health food trends at play here -- the rising popularity of acai bowls, sushi, poke and superfood -- which should limit comps' upside in the near future. As such, today's perfect valuation isn't sustainable for CMG stock. Roku (ROKU)Source: Shutterstock YTD Gain: 130%How It Got Here: Streaming device giant Roku (NASDAQ:ROKU) used to be one of the market's favorite growth stories, thanks to its broad exposure to the secular growth of the SVOD (streaming video on demand) market. But the market forgot about that long-term growth narrative in late 2018 amid slowing economy and rising competition concerns. Roku put those concerns to rest in early 2019 with strong holiday quarter numbers. The market remembered that this is a secular growth company, and Roku stock has consequently rallied in a big way ever since.Where It's Going Next: Roku stock is likely only heading higher from here. The long term growth narrative is only becoming more and more compelling, as the company continues to extend its dominance as the go-to SVOD service aggregator and access point. Even competitors are starting to use Roku to grow their own streaming services. Meanwhile, the stock successfully tested and held the critical $60 level, and is now bouncing strongly off it. As such, the fundamentals and technicals remain favorable here, meaning Roku stock should stay on an uptrend. MongoDB (MDB)Source: Hillary via FlickrYTD Gain: 82%How It Got Here: Shares of database company MongoDB (NASDAQ:MDB) have been on a tear in 2019 thanks to a monster fourth quarter earnings report which underscored that this company is successfully gaining share in the exceptionally large database market using a unique approach. Specifically, MongoDB provides database services which morph together relational architectures with non-relational architectures (read more about it here). This unique approach to databases is gaining popularity as the volume of non-relational data grows, and MongoDB's customers and revenues are consequently growing very quickly. As that has happened, MDB stock has rallied.Where It's Going Next: MDB stock has come very far, very fast, and is very expensive, even relative to other high-growth SaaS stocks. Thus, near-term turbulence is warranted. But this is nothing to worry about. Long term, MDB stock will only head higher. * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos This is a $370 million revenue company rapidly gaining share in a $60 billion database market, meaning the runway for growth is long. So long as MongoDB continues to execute on that runway (as they have over the past several years), this stock will only go higher from here in the long run. The Trade Desk (TTD)Source: Shutterstock YTD Gain: 72%How It Got Here: In case you haven't heard, programmatic advertising -- using machines to buy and sell ads -- is the future, and The Trade Desk (NASDAQ:TTD) is the company at the heart of the programmatic advertising revolution. Broadly speaking, the automation wave is starting to hit the advertising world, and companies are increasingly relying on machines and algorithms (not humans) to optimize ad spend allocation. This pivot towards machines means a pivot towards The Trade Desk's platform, which is home to the best programmatic advertising solutions on the market. Recent numbers underscore that this pivot is happening with increasing scale, and TTD stock has consequently turned into a big winner.Where It's Going Next: TTD stock is one of my favorite long-term growth stocks. Gross ad spend on the platform was under $2.5 billion last year. The global advertising industry is marching towards $1 trillion. Eventually, most of that $1 trillion in ad spend will be transacted problematically, mostly because automation provides unparalleled efficiency advantages. Thus, TTD is tapping into a tiny portion of its addressable market at scale. So long as The Trade Desk maintains its current leadership position in the programmatic advertising market, this company will continue to grow at a very rapid rate, and that will help keep TTD stock on a long term uptrend. Snap (SNAP)Source: Shutterstock YTD Gain: 99%How It Got Here: Left-for-dead social media company Snap (NYSE:SNAP) has staged an impressive turnaround in 2019 mostly as a result of one thing: user base stabilization. From 2017 into the end of 2018, Snap's user base went from steady growth, to back-to-back quarters of user base shrinkage. Everyone freaked out, and SNAP stock was killed. Then, in early 2019, Snap's user base returned to growth. That improved investor sentiment, and put bulls back in control. SNAP stock has consequently almost doubled in 2019.Where It's Going Next: User growth is so big here because, if the user base continues to grow, advertisers will continue to flock to the platform, average revenue per user will rise, margins will expand, and net losses will turn into net profits. I think all of that will happen. But, not as quickly as the current price tag on SNAP stock implies. * 7 Reasons to Buy Housing Stocks in 2019 The user base barely grew last quarter, Instagram is still eating Snap's lunch, and margins are a long ways off from inflecting into positive territory. As such, slower-than-expected growth throughout 2019 will likely short-circuit this rally in SNAP stock. Cronos (CRON)Source: Shutterstock YTD Gain: 78%How It Got Here: The cannabis craze is alive and well. Just see Canadian cannabis company Cronos (NASDAQ:CRON). All pot stocks have staged big rallies in 2019 due to broad cannabis market fundamental improvements, including consistent and steady growth in the Canadian cannabis market as well as the legalization of hemp in the U.S. But, Cronos has been the out-sized 2019 winner thanks to the company's relatively small market cap and a near $2 billion investment from tobacco giant Altria (NYSE:MO), which gives the company sufficient resources to go from small cannabis player to big cannabis player.Where It's Going Next: There is a long-term opportunity for Cronos to take the Altria investment, rapidly grow share in both the Canadian and global cannabis markets, and turn into a $10 billion-plus company one day. But, recent quarterly numbers challenge that thesis, as Cronos reported below-peer cannabis revenue and kilograms sold growth. That implies market share losses, not market share gains. So long as that remains true, it's tough to see CRON stock tacking additional gains onto its already huge year-to-date rally.As of this writing, Luke Lango was long ROKU, MDB, and TTD. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Tech Stocks That Transformed Their Business * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos * 7 Weak Blue-Chip Stocks to Trim Immediately Compare Brokers The post 7 Breakout Stocks to Watch in 2019 appeared first on InvestorPlace.
Shares of struggling merchandise retailer Bed Bath & Beyond (NASDAQ:BBBY) soared on Tuesday, Mar. 26, after the Wall Street Journal reported that activist investors have targeted the stock for some major changes. BBBY stock popped more than 20% higher in response to the news.Source: Mike Mozart via FlickrFull disclosure, I'm not a big fan of chasing rallies. That's particularly true with big rallies in BBBY. The last time the stock popped like this was in early 2019, following a bullish outlook from management in the Q3 earnings report. I said fade the rally. Over the next two months, BBBY rallied a bit more, but ultimately dropped more than 10%.The same dynamic will play out this time around. BBBY stock is soaring on activist investor interest. But, there isn't much activist investors can do to turn this sinking ship around. Revenues and margins are under pressure. The competitive landscape is only getting more intense.InvestorPlace - Stock Market News, Stock Advice & Trading TipsConsumers don't really have a need to shop at Bed Beth & Beyond over, say, Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), or Wayfair (NYSE:W). Not to mention, there's a mountain of debt sitting on the balance sheet, which basically serves as a ticking time bomb for this increasingly irrelevant retailer. * 8 Genomic Testing Stocks That Can Ease the Sting of Theranos Overall, the chances of a turnaround here are slim. Yet, BBBY stock is being priced as if a turnaround is likely to happen. That disconnect means this big rally in BBBY stock should be faded. A Turnaround Likely Won't HappenInvestors are rushing into BBBY stock on the belief that three activist investors (Legion, Macellum, and Ancora) will be able to replace management, execute a new operational strategy, and successfully pull off a Bed Bath and Beyond turnaround.To be clear, the likelihood of this happening is very, very slim. First off, the three activist investors together control around a 5% stake in Bed Bath & Beyond. That's not nearly enough to get that excited about, and further implies that these activists have their work cut out in terms of doing what they want to do, which is replace the entire board and CEO.Second, even if the activist investors are successful in replacing the board and CEO, the likelihood that these changes lead to a Bed Bath & Beyond turnaround is low. The harsh reality is that consumers don't need Bed Bath & Beyond anymore. Essentially everything Bed Bath & Beyond sells, can be bought at Amazon, Walmart, or Target (NYSE:TGT), usually at lower prices and almost always with higher convenience (all three big retailers have significantly more robust omni-channel capabilities).Amazon, Walmart, and Target also sell a host of other things like groceries, cosmetics, and clothing, meaning they offer one-stop-shop convenience which Bed Bath & Beyond critically lacks. They are also only getting bigger, more aggressively expanding into new product categories and building out faster and more effective omni-channel sales networks.Thus, the need for consumers to go to a Bed Bath & Beyond versus a Walmart or Target is at an all time low, and only going lower. As it goes lower, it will become tougher and tougher for any management team to pull off a Bed Bath & Beyond turnaround. The Valuation Is at Disconnect with RealityAt the present moment, Bed Bath & Beyond is suffering from a tri-fecta of headwinds. Sales are being challenged by eroding relevance and rising competition. Gross margins are dropping thanks to intense price competition. Opex rates are rising because the company is having to spend on marketing just to maintain tepid sales growth.In order for BBBY to head higher from here, all three of those headwinds need to turn around. Specifically, sales growth needs to be consistently positive, gross margins have to recover, and opex rates have to start falling.If all that happens, Bed Bath & Beyond could be looking at $3 in EPS by fiscal 2023. Based on a historically average 10 forward multiple, that equates to a fiscal 2022 price target of $30. Discounted back by 10% per year, that implies a fiscal 2018 price target of $20.Thus, if a big Bed Bath & Beyond turnaround does materialize, this stock has upside to $20 over the next few months.But, the odds of that turnaround happening are small, given that the retailer's competitive challenges are only growing with time. As such, a far more likely outcome for sales and margins over the next several years is that they continue to be pressured by rising competition and falling relevancy. In that more likely scenario, EPS pans out around $2 in five years. Using the same math above, that implies a fiscal 2018 price target of $13.50.As of this writing, BBBY stock is trading at the midpoint of those two potential price targets, implying each scenario has equal probability. They don't. The $13.50 price target has far higher probability than the $20 price target. As such, prices on the high side of $15 today seem too high. Bottom Line on BBBY StockIf Bed Bath & Beyond does manage to turn things around, BBBY stock has great upside potential over the next several years. The problem is that the likelihood of a turnaround is low. Much like RadioShack, Sears, K-Mart, and J.C. Penney (NYSE:JCP), Bed Bath & Beyond falls into the category of retailers that consumers simply don't need anymore.I don't see what management can do to change that. Competition is getting bigger and better. That competition has more resources. They can win the price battle. They can win the convenience battle. Ultimately, they can do everything Bed Bath & Beyond does. They can just do it better.As such, the most likely path forward for BBBY stock is lower for longer.As of this writing, Luke Lango was long AMZN and TGT. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * The 7 Best Bond Funds to Buy for a Shift in Interest Rates * 10 Tech Stocks With Key Products That Face an Uncertain Future * 7 SaaS Stocks to Buy for Long-Term Gains Compare Brokers The post Dump BBBY Stock Because There's No Turnaround Coming appeared first on InvestorPlace.
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Blackledge said he met with one of the largest home sellers on Amazon, and said the unnamed company expects to generate total revenue of $50 million 2019, with 60 percent of revenue generated on Amazon in North America — a 30-40 percent gain year-over-year. Amazon’s business advertising is still in beta, and the seller’s ad spend is capped, Blackledge said.
Wayfair, the Boston-based online furniture retailer whose net revenue topped $2 billion in the fourth quarter, announced this morning it plans to open its first full-service retail store this fall. The store, which will be based in Natick, Massachusetts, will connect the company's online business to the real world, allowing customers to meet with home design experts, try out the furniture in person, and order home delivery of both in-store products and those from Wayfair's website. The larger retail store will be located in the Natick Mall in Natick, MA - the same place where Wayfair ran its holiday 2018 pop-up.