RBC Capital raised its price target on Wayfair Inc. to $92 from $86 and left its rating at Sector Perform, citing the online furniture retailer's solid fourth-quarter performance while noting persistent caution among investors. With the shares trading at $80.03, the updated target implies roughly 15% potential upside.
The firm pointed to Wayfair's strong quarterly results but emphasized that a muted outlook for the category combined with management remarks that gross margin could fall below 30% remain headwinds for the stock. That concern is notable given Wayfair's recent metrics: a gross profit margin of 30.22% over the last twelve months, revenue of $12.46 billion and EBITDA of $395 million.
Revised near-term estimates
RBC raised its first-quarter net sales growth forecast to 5.7% from 4.5% previously, aligning the projection with company guidance that calls for mid-single-digit growth. The broker also lifted its adjusted EBITDA estimate for the quarter to $140 million from $126 million, which equates to a 4.8% margin versus its prior 4.4% estimate and against company guidance of 4.5% to 5.5%.
Looking further ahead, RBC adjusted its model for 2026 and 2027. Net sales growth assumptions were nudged higher to 3.3% for 2026 and 5.8% for 2027, up from prior estimates of 2.8% and 5.0% respectively. Corresponding adjusted EBITDA forecasts were also increased: the firm now projects $770 million in adjusted EBITDA for 2026 and $885 million for 2027, versus earlier estimates of $738 million and $837 million.
Valuation basis and third-party analysis
RBC's new $92 price target is founded on roughly 18 times its revised 2027 adjusted EBITDA estimate of $885 million. By comparison, InvestingPro analysis cited within the available research indicates that Wayfair currently trades at an EV/EBITDA multiple of 32.65 and is viewed as overvalued relative to its Fair Value on that platform. The InvestingPro notes also state that analysts expect the company to be profitable this year, an insight listed among other findings in the Pro Research Report covering Wayfair and more than 1,400 U.S. equities.
Recent earnings and peer analyst moves
Wayfair reported fourth-quarter 2025 results that topped estimates on the bottom line, delivering earnings per share of $0.85 versus expectations of $0.68. The company also met revenue forecasts with $3.3 billion for the quarter.
Following the earnings release, Piper Sandler reiterated an Overweight rating and kept its price target at $125, citing market share gains as a favorable development. JPMorgan adjusted its price target down to $105 from $114 while maintaining an Overweight rating, pointing to margin pressure as a concern.
Operational details in the quarter included U.S. revenue growth of 7.4%, above the estimated 6%, and adjusted EBITDA reported at 11% above Consensus Metrix. Despite those results, Wayfair's shares declined in pre-market trading, a reflection of mixed sentiment among investors and analysts.
Bottom line
RBC's update underscores a balance between improving top- and bottom-line assumptions and lingering margin and category risks. The firm raised near-term and multi-year sales and EBITDA estimates, anchored its new target to a multiple of 2027 adjusted EBITDA, and left its Sector Perform rating in place while the market continues to weigh growth against profitability pressures.