Wayfair's results defy anemic housing market, treacherous tariff landscape -- analysts

[Wayfair Store]
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A modest improvement in the home furnishings market and a volatile trade environment isn’t holding back Wayfair (W [https://seekingalpha.com/symbol/W]) from solid revenue gains and a substantial improvement in profits as the company’s adoption of AI-fueled searches, speedy deliveries, and a popular loyalty program is reflected in another better-than-expected quarter. [https://seekingalpha.com/news/4509259-wayfair-shares-rally-on-upbeat-q3-results-increased-spending-by-repeat-customers]

“As we shared in Q2, we see the groundwork we’ve laid over multiple years directly driving share capture and profitability despite a category that remains stubbornly sluggish,” Wayfair CEO Niraj Shah said on the company’s third quarter earnings call [https://seekingalpha.com/article/4834030-wayfair-inc-w-q3-2025-earnings-call-transcript] with analysts, noting that Wayfair’s (W [https://seekingalpha.com/symbol/W]) growth trajectory is driven by “Wayfair-specific factors” and not reliant on a recovery in the housing market or the evolving tariff landscape.

The company saw gains in spending by active customers, delivered orders, and the price of an average order, while at the same time managing its fixed costs and increasing its focus on ad spending.

And then there’s AI.

The platform’s embrace of the technology could impact every line-item on Wayfair’s P&L over the next five years, Jefferies’ Jonathan Matuszewski predicts, reiterating his Buy rating on the stock to reflect the view that “Wayfair is an AI pioneer in the home furnishings industry and has sizable revenue accelerants and cost take outs on the horizon from this push.”

The company’s commitment to AI was clear during its earnings call, where management devoted roughly a third of the discussion to the topic — featuring an unusual appearance by the chief technology officer.

CTO Fiona Tan said AI investments are “pragmatic and results-oriented,” targeting three key outcomes: delivering a more intuitive and inspiring shopping experience, embedding AI to improve operational efficiency, and positioning the platform as “the best possible partner” for suppliers.

If Wayfair can deliver on sustainably stronger fundamentals and manage pricing and volume headwinds with improving profitability and market shares gains, “this may drive a multiple re-rating and unlock significantly higher value for the stock,” Morgan Stanley’s Simeon Gutman says, reiterating his Buy rating on the stock with a 24% hike to his price target to $130.

BofA Securities also weighed in on Wayfair’s (W [https://seekingalpha.com/symbol/W]) results, upgrading the stock to Buy from Neutral, giving a 51% bump to its price target to $130, representing a 22% upside to Tuesday’s closing price.

Following a 23% rally on Tuesday with a new 3 ½ year high, Wayfair (W [https://seekingalpha.com/symbol/W]) is adding another 1% to its 138% gain this year.

MORE ON WAYFAIR

* Wayfair: Strong Performance, Terrible Valuation (Upgrade) [https://seekingalpha.com/article/4834324-wayfair-strong-performance-terrible-valuation-upgrade]
* Wayfair Inc. (W) Q3 2025 Earnings Call Transcript [https://seekingalpha.com/article/4834030-wayfair-inc-w-q3-2025-earnings-call-transcript]
* Wayfair: Valuation Outruns Fundamentals [https://seekingalpha.com/article/4829052-wayfair-valuation-outruns-fundamentals]
* Wayfair outlines 5.5%-6.5% Q4 adjusted EBITDA margin target as AI initiatives drive structural gains [https://seekingalpha.com/news/4509494-wayfair-outlines-5_5-percentminus-6_5-percent-q4-adjusted-ebitda-margin-target-as-ai]
* Wayfair shares rally on upbeat Q3 results, increased spending by repeat customers [https://seekingalpha.com/news/4509259-wayfair-shares-rally-on-upbeat-q3-results-increased-spending-by-repeat-customers]