Sam Boughedda

Investing.com —  Wayfair Inc (NYSE) Inc shares dropped more than 5% Wednesday, after Seth Basham from Wedbush downgraded it to neutral and outperform. Basham also told investors that the “results for 2021” have been disappointing.

Basham lowered the target price for Wayfair shares from $290 to $160

An analyst pointed out that the company’s key metrics such as net customer addeds, customer acquisition costs, and orders per customer have been showing “yellow signs” for years. According to Wedbush, the metrics are trending lower than pre-pandemic levels.

Basham stated that the problems have had an impact on company shares which fell 27% over the last 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.