By Sam Boughedda
Investing.com — Wayfair Inc (NYSE:W) Inc shares sank more than 5% Wednesday after Wedbush analyst Seth Basham downgraded the stock to neutral from outperform, telling investors in a research note that "results in 2021 have been underwhelming."
Basham cut the price target on Wayfair shares to $160 from $290.
The analyst noted that there have constantly been "yellow flags" in key performance metrics for the American e-commerce company, such as net customer adds, customer acquisition costs and orders per customer. The metrics have been trending below pre-pandemic levels, according to Wedbush.
Basham said the issues have weighed on the company's shares, which are down 27% in the past three months.
"We believe pressure has intensified due not only to softer category sales trends in December (and despite consumers’ renewed reluctance to shop at stores due to Omicron), but also due to a less attractive value proposition and supply chain challenges,” explained Seth Basham wrote.
In addition to the Wedbush downgrade, Wells Fargo slashed its price target on the stock to $195 from $250, saying Wayfair is among the most rate-sensitive companies.