Stifel has lowered its price target on Wayfair Inc. to $89 from $100 and retained a Hold rating following the companys fourth-quarter report. The retailer delivered quarterly revenue and EBITDA above analyst expectations, and issued guidance that matched Wall Street estimates, but the update contained several notes that tempered investor enthusiasm.
Management reported a decline in customer counts and described the underlying category as weakening - down mid-single digits versus the low-single-digit decline a quarter earlier. That deterioration was a focal point of the quarter, even as the company posted top-line strength and profitability metrics that exceeded forecasts.
On a trailing twelve-month basis, Wayfair reported a loss of $2.45 per share. Looking ahead, analysts aggregated expectations for fiscal 2026 call for earnings of $3.14 per share, implying a return to profitability over the medium term.
Market reaction was sharp. Shares dropped roughly 13% on the news, trading at $84.10 and valuing the company at about $10.91 billion. The decline underscored the stocks volatility; despite the pullback, shares remain up 73% over the past year. Separate analysis from InvestingPro indicates the shares appear overvalued relative to their Fair Value, according to that platforms assessment.
Key operational and revenue notes
- Wayfairs loyalty program now contributes more than 15% of U.S. revenue, a meaningful share of domestic sales.
- The company noted that physical store initiatives are supporting sustained revenue growth even as the broader category experiences pressure.
- Stifel adjusted its internal estimates and the price target in response to the quarters results.
Broader analyst responses
Several other brokerages moved their targets or reiterated positions after the quarter. JPMorgan lowered its price target to $105 from $114 while keeping an Overweight rating. Truist Securities trimmed its target to $105 from $120, citing concerns around margin outlook. RBC Capital increased its target to $92 from $86, pointing to the strong fourth-quarter results despite a muted outlook for the category. Piper Sandler maintained an Overweight stance with a $125 target, highlighting accelerating market share gains.
The quarters reported earnings per share came in ahead of consensus: Wayfair posted EPS of $0.85 for the fourth quarter of 2025 versus the $0.68 analysts had forecast. Revenue for the quarter met estimates at $3.3 billion, with U.S. revenue up 7.4% compared with the 6.0% estimate. Despite outperformance on sales, commentary around margin pressures contributed to the mixed reception from investors and analysts.
What this means for markets and investors
The report illustrates a split between demand and margin dynamics: revenue and EBITDA beat expectations, yet category health and margin outlooks prompted caution. For investors focused on retail and consumer discretionary exposures, the quarter offers both positive and cautionary signals. The stocks sizeable year-over-year gain and the post-release decline highlight how quickly sentiment can shift around execution and margin visibility.
Stifels reduction of the price target, together with similar moves from other firms, reflects a reassessment of near-term profitability and valuation under the current operating backdrop. The companys path back to sustained profitability remains subject to category trends, customer metrics, and margin recovery.