Wayfair Inc (NYSE:W) stock, the $2.5 billion online home goods retailer, has been on an absolute rampage in 2015.
After first-quarter Wayfair earnings and revenue blew past expectations on Monday, I’m saying it again: Wayfair stock is best-in-class in the retail industry.
Overstock.com, Inc. (NASDAQ:OSTK), eBay Inc (NASDAQ:EBAY), Amazon.com, Inc. (NASDAQ:AMZN) … none of them are able to do what Wayfair’s doing today.
In short, Wayfair is simply growing more rapidly than these big-name competitors. Far more quickly. And that makes W stock look like a steal at today’s prices.
Wall Street would seem to agree, with Wayfair shares trading up more than 10% since last Wednesday.
A Quarter for the Ages
For the quarter ended in March, Wayfair reported $424.4 million in revenue, absolutely demolishing consensus $390 million expectations. As for earnings per share, Wayfair isn’t quite profitable yet, but it managed to lose less than expected: W stock lost 23 cents per share in the first quarter against consensus expectations of a 26-cent loss.
Now, some investors may be scared away by the fact that W stock isn’t yet in the black. Of course, AMZN still struggles to make money consistently even 18 years after its IPO. And that stock has done pretty well for itself (and for investors).
Wayfair, plainly and simply, has better growth prospects than AMZN, EBAY, and OSTK, mostly because it’s smaller than all three and because it has a younger brand that many people still don’t know about.
Consider the expected year-over-year, full-year revenue growth at these companies in 2015:
W stock will likely even see analysts boost that revenue growth number even higher, considering first-quarter sales grew 52.3% year-over-year.
A lot of the company’s money is going towards informing the masses that it exists — something Wayfair must do before it can hope to churn out consistent profits.
Marketing and advertising expenses rose 34% year-over-year in the most recent quarter. But that investment yielded excellent results, as active customers grew by 49% to 3.6 million and a growing number of repeat customers ordered on the website.
Wayfair stock should also benefit as trailing-twelve-month net revenue per active user and average order values increase, as they did last quarter. Those two categories were up 7.1% to $346 and 3.5% to $206, respectively.
This isn’t the first time I’ve touted Wayfair stock as a superior investment to AMZN, nor the first time I’ve marveled over its growth. I named Wayfair as one of my five best stocks to buy for 2015. Since that article, W stock is up 62%.
But I don’t just talk about how great Wayfair is. About a month ago, I got sick and tired of standing on the sidelines and watching the stock soar, so I bought in. And after the company’s blowout results, I’m considering doubling down.
As of this writing, John Divine was long shares of W stock. You can follow him on Twitter at @divinebizkid or email him at editor@investorplace.com.
