The stock of an e-commerce player that would have increased your money tenfold since the Corona crash? No question about it: that would be an extraordinary performance. Even assuming that many tech and high-growth stocks have seen massive gains of late anyway, this kind of performance is anything but ordinary.
One share would have done that with a focus on e-commerce: namely that of Wayfair. Today let’s take a look at why the share was able to climb from its low of 25.80 euros to the current price level of 258.20 euros (May 28, 2021, relevant for all prices and fundamental key figures), which corresponds to a tenfold increase. As well as a look at what could be special about the share in the future.
Wayfair: e-commerce player with strong ambitions
Anyway, as we can see with a look at Wayfair’s stock, this is an e-commerce player with very strong ambitions. The business model is anything but unusual: The company specializes in furnishings. No matter if furniture, lamps or other things. On this page you will find exciting offers.
But what exactly is it that makes Wayfair so successful in e-commerce? The niche? The growth? Or the quality? Possibly all put together. After all, the name is establishing itself in the online mail order business in the USA, but is also growing in Germany and co. Thanks to the niche of furniture mail order, the company can also specialize, which entails a lot of qualitative aspects. But more on that later.
In any case, if we focus on growth, we will see a very successful trend. In the first quarter of this fiscal year, for example, sales climbed 49.2% to $ 3.5 billion, which is definitely not a small amount. With net income of $ 18.2 million, the e-commerce player is also making huge strides towards profitability.
What is special about Wayfair, however: In e-commerce, management is concentrating on establishing something different, especially in the furniture sector. By registering, consumers get further advantages, which could create an ecosystem. The return rate is also very high, which could result in extremely strong growth potential in the future as well.
Wayfair: Still a purchase today?
Of course, Foolish investors can only answer for themselves whether Wayfair shares are still a buy today. In any case, one thing is certain: the current market capitalization is only 31 billion US dollars, which is not too expensive even after a tenfold increase. There could still be potential, especially in the e-commerce market and in this special niche. Also in terms of valuation, the share still looks interesting to me.
The article No fun: This e-commerce player would have increased your money 10-fold since the Corona crash first appeared on The Motley Fool Germany.
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Vincent does not own any of the stocks mentioned. The Motley Fool owns shares of and recommends Wayfair.
Motley Fool Deutschland 2021
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