Intrinsic value of Wayfair Cl A - W

Previous Close

$69.73

  Intrinsic Value

$1.63

stock screener

  Rating & Target

str. sell

-98%

  Value-price divergence*

-180%

Previous close

$69.73

 
Intrinsic value

$1.63

 
Up/down potential

-98%

 
Rating

str. sell

 
Value-price divergence*

-180%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of W stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 6.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  50.22
  42.70
  38.93
  35.54
  32.48
  29.73
  27.26
  25.04
  23.03
  21.23
  19.61
  18.15
  16.83
  15.65
  14.58
  13.62
  12.76
  11.99
  11.29
  10.66
  10.09
  9.58
  9.13
  8.71
  8.34
  8.01
  7.71
  7.44
  7.19
  6.97
  6.78
Revenue, $m
  3,380
  4,823
  6,701
  9,082
  12,032
  15,610
  19,866
  24,839
  30,560
  37,048
  44,312
  52,352
  61,163
  70,734
  81,049
  92,091
  103,844
  116,291
  129,417
  143,211
  157,664
  172,774
  188,540
  204,967
  222,064
  239,845
  258,328
  277,537
  297,498
  318,243
  339,806
Variable operating expenses, $m
 
  4,997
  6,942
  9,409
  12,465
  16,172
  20,580
  25,732
  31,659
  38,380
  45,904
  54,234
  63,361
  73,276
  83,962
  95,401
  107,576
  120,470
  134,068
  148,358
  163,331
  178,984
  195,316
  212,333
  230,045
  248,465
  267,613
  287,512
  308,191
  329,681
  352,019
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  3,577
  4,997
  6,942
  9,409
  12,465
  16,172
  20,580
  25,732
  31,659
  38,380
  45,904
  54,234
  63,361
  73,276
  83,962
  95,401
  107,576
  120,470
  134,068
  148,358
  163,331
  178,984
  195,316
  212,333
  230,045
  248,465
  267,613
  287,512
  308,191
  329,681
  352,019
Operating income, $m
  -196
  -174
  -241
  -327
  -433
  -561
  -714
  -893
  -1,099
  -1,332
  -1,593
  -1,882
  -2,198
  -2,542
  -2,913
  -3,310
  -3,732
  -4,180
  -4,651
  -5,147
  -5,667
  -6,210
  -6,776
  -7,367
  -7,981
  -8,620
  -9,285
  -9,975
  -10,692
  -11,438
  -12,213
EBITDA, $m
  -140
  -122
  -170
  -230
  -305
  -396
  -503
  -629
  -774
  -939
  -1,123
  -1,327
  -1,550
  -1,792
  -2,054
  -2,334
  -2,631
  -2,947
  -3,280
  -3,629
  -3,995
  -4,378
  -4,778
  -5,194
  -5,627
  -6,078
  -6,546
  -7,033
  -7,539
  -8,065
  -8,611
Interest expense (income), $m
  0
  1
  -4
  3
  12
  23
  37
  54
  73
  95
  120
  148
  179
  213
  249
  289
  332
  377
  425
  475
  528
  584
  642
  703
  766
  832
  900
  971
  1,045
  1,122
  1,202
Earnings before tax, $m
  -194
  -175
  -237
  -330
  -445
  -585
  -751
  -947
  -1,171
  -1,426
  -1,713
  -2,029
  -2,377
  -2,755
  -3,162
  -3,599
  -4,064
  -4,556
  -5,076
  -5,622
  -6,195
  -6,794
  -7,418
  -8,069
  -8,747
  -9,452
  -10,185
  -10,946
  -11,738
  -12,560
  -13,415
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -194
  -175
  -237
  -330
  -445
  -585
  -751
  -947
  -1,171
  -1,426
  -1,713
  -2,029
  -2,377
  -2,755
  -3,162
  -3,599
  -4,064
  -4,556
  -5,076
  -5,622
  -6,195
  -6,794
  -7,418
  -8,069
  -8,747
  -9,452
  -10,185
  -10,946
  -11,738
  -12,560
  -13,415

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  349
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  762
  589
  819
  1,110
  1,470
  1,907
  2,427
  3,035
  3,734
  4,527
  5,414
  6,397
  7,474
  8,643
  9,903
  11,253
  12,689
  14,210
  15,813
  17,499
  19,265
  21,111
  23,038
  25,045
  27,134
  29,307
  31,565
  33,912
  36,351
  38,886
  41,521
Adjusted assets (=assets-cash), $m
  413
  589
  819
  1,110
  1,470
  1,907
  2,427
  3,035
  3,734
  4,527
  5,414
  6,397
  7,474
  8,643
  9,903
  11,253
  12,689
  14,210
  15,813
  17,499
  19,265
  21,111
  23,038
  25,045
  27,134
  29,307
  31,565
  33,912
  36,351
  38,886
  41,521
Revenue / Adjusted assets
  8.184
  8.188
  8.182
  8.182
  8.185
  8.186
  8.185
  8.184
  8.184
  8.184
  8.185
  8.184
  8.183
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
  8.184
Average production assets, $m
  178
  256
  355
  481
  638
  827
  1,053
  1,316
  1,620
  1,964
  2,349
  2,775
  3,242
  3,749
  4,296
  4,881
  5,504
  6,163
  6,859
  7,590
  8,356
  9,157
  9,993
  10,863
  11,769
  12,712
  13,691
  14,709
  15,767
  16,867
  18,010
Working capital, $m
  -80
  -613
  -851
  -1,153
  -1,528
  -1,983
  -2,523
  -3,155
  -3,881
  -4,705
  -5,628
  -6,649
  -7,768
  -8,983
  -10,293
  -11,696
  -13,188
  -14,769
  -16,436
  -18,188
  -20,023
  -21,942
  -23,945
  -26,031
  -28,202
  -30,460
  -32,808
  -35,247
  -37,782
  -40,417
  -43,155
Total debt, $m
  29
  -124
  83
  345
  669
  1,063
  1,531
  2,078
  2,707
  3,420
  4,219
  5,103
  6,072
  7,125
  8,259
  9,473
  10,766
  12,135
  13,578
  15,095
  16,684
  18,346
  20,080
  21,886
  23,766
  25,722
  27,755
  29,867
  32,062
  34,343
  36,715
Total liabilities, $m
  682
  530
  737
  999
  1,323
  1,717
  2,185
  2,732
  3,361
  4,074
  4,873
  5,757
  6,726
  7,779
  8,913
  10,127
  11,420
  12,789
  14,232
  15,749
  17,338
  19,000
  20,734
  22,540
  24,420
  26,376
  28,409
  30,521
  32,716
  34,997
  37,369
Total equity, $m
  79
  59
  82
  111
  147
  191
  243
  304
  373
  453
  541
  640
  747
  864
  990
  1,125
  1,269
  1,421
  1,581
  1,750
  1,926
  2,111
  2,304
  2,504
  2,713
  2,931
  3,157
  3,391
  3,635
  3,889
  4,152
Total liabilities and equity, $m
  761
  589
  819
  1,110
  1,470
  1,908
  2,428
  3,036
  3,734
  4,527
  5,414
  6,397
  7,473
  8,643
  9,903
  11,252
  12,689
  14,210
  15,813
  17,499
  19,264
  21,111
  23,038
  25,044
  27,133
  29,307
  31,566
  33,912
  36,351
  38,886
  41,521
Debt-to-equity ratio
  0.367
  -2.100
  1.010
  3.110
  4.550
  5.570
  6.310
  6.850
  7.250
  7.560
  7.790
  7.980
  8.120
  8.240
  8.340
  8.420
  8.480
  8.540
  8.590
  8.630
  8.660
  8.690
  8.720
  8.740
  8.760
  8.780
  8.790
  8.810
  8.820
  8.830
  8.840
Adjusted equity ratio
  -0.654
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -194
  -175
  -237
  -330
  -445
  -585
  -751
  -947
  -1,171
  -1,426
  -1,713
  -2,029
  -2,377
  -2,755
  -3,162
  -3,599
  -4,064
  -4,556
  -5,076
  -5,622
  -6,195
  -6,794
  -7,418
  -8,069
  -8,747
  -9,452
  -10,185
  -10,946
  -11,738
  -12,560
  -13,415
Depreciation, amort., depletion, $m
  56
  51
  71
  96
  128
  166
  211
  263
  324
  393
  470
  555
  648
  750
  859
  976
  1,101
  1,233
  1,372
  1,518
  1,671
  1,831
  1,999
  2,173
  2,354
  2,542
  2,738
  2,942
  3,153
  3,373
  3,602
Funds from operations, $m
  215
  -123
  -165
  -233
  -317
  -419
  -541
  -683
  -847
  -1,034
  -1,243
  -1,474
  -1,729
  -2,005
  -2,303
  -2,623
  -2,963
  -3,324
  -3,704
  -4,104
  -4,524
  -4,962
  -5,420
  -5,897
  -6,393
  -6,910
  -7,447
  -8,004
  -8,584
  -9,187
  -9,813
Change in working capital, $m
  152
  -183
  -238
  -302
  -375
  -454
  -540
  -632
  -727
  -824
  -922
  -1,021
  -1,119
  -1,215
  -1,310
  -1,402
  -1,493
  -1,581
  -1,667
  -1,752
  -1,836
  -1,919
  -2,002
  -2,086
  -2,171
  -2,258
  -2,347
  -2,440
  -2,535
  -2,635
  -2,739
Cash from operations, $m
  63
  60
  73
  69
  58
  35
  0
  -51
  -121
  -210
  -320
  -453
  -610
  -790
  -993
  -1,220
  -1,470
  -1,743
  -2,037
  -2,352
  -2,688
  -3,043
  -3,418
  -3,811
  -4,222
  -4,651
  -5,099
  -5,565
  -6,049
  -6,552
  -7,074
Maintenance CAPEX, $m
  0
  -36
  -51
  -71
  -96
  -128
  -165
  -211
  -263
  -324
  -393
  -470
  -555
  -648
  -750
  -859
  -976
  -1,101
  -1,233
  -1,372
  -1,518
  -1,671
  -1,831
  -1,999
  -2,173
  -2,354
  -2,542
  -2,738
  -2,942
  -3,153
  -3,373
New CAPEX, $m
  -128
  -78
  -100
  -126
  -156
  -190
  -226
  -264
  -303
  -344
  -385
  -426
  -467
  -507
  -547
  -585
  -623
  -660
  -696
  -731
  -766
  -801
  -836
  -871
  -906
  -942
  -980
  -1,018
  -1,058
  -1,099
  -1,143
Cash from investing activities, $m
  -96
  -114
  -151
  -197
  -252
  -318
  -391
  -475
  -566
  -668
  -778
  -896
  -1,022
  -1,155
  -1,297
  -1,444
  -1,599
  -1,761
  -1,929
  -2,103
  -2,284
  -2,472
  -2,667
  -2,870
  -3,079
  -3,296
  -3,522
  -3,756
  -4,000
  -4,252
  -4,516
Free cash flow, $m
  -33
  -53
  -78
  -128
  -195
  -282
  -391
  -526
  -687
  -877
  -1,098
  -1,349
  -1,631
  -1,945
  -2,290
  -2,665
  -3,070
  -3,503
  -3,966
  -4,455
  -4,972
  -5,515
  -6,085
  -6,680
  -7,301
  -7,948
  -8,621
  -9,321
  -10,049
  -10,805
  -11,591
Issuance/(repayment) of debt, $m
  0
  -153
  206
  262
  324
  393
  468
  547
  629
  713
  799
  884
  969
  1,052
  1,134
  1,214
  1,292
  1,369
  1,443
  1,517
  1,589
  1,662
  1,734
  1,806
  1,880
  1,955
  2,033
  2,112
  2,195
  2,281
  2,371
Issuance/(repurchase) of shares, $m
  0
  504
  260
  359
  481
  628
  803
  1,007
  1,241
  1,506
  1,801
  2,127
  2,485
  2,872
  3,288
  3,734
  4,207
  4,708
  5,236
  5,791
  6,372
  6,978
  7,611
  8,270
  8,956
  9,669
  10,411
  11,181
  11,982
  12,814
  13,678
Cash from financing (excl. dividends), $m  
  -21
  351
  466
  621
  805
  1,021
  1,271
  1,554
  1,870
  2,219
  2,600
  3,011
  3,454
  3,924
  4,422
  4,948
  5,499
  6,077
  6,679
  7,308
  7,961
  8,640
  9,345
  10,076
  10,836
  11,624
  12,444
  13,293
  14,177
  15,095
  16,049
Total cash flow (excl. dividends), $m
  -54
  298
  388
  493
  610
  740
  880
  1,029
  1,183
  1,342
  1,502
  1,663
  1,822
  1,979
  2,133
  2,283
  2,430
  2,574
  2,714
  2,852
  2,989
  3,125
  3,260
  3,397
  3,535
  3,677
  3,822
  3,972
  4,128
  4,290
  4,459
Retained Cash Flow (-), $m
  164
  -504
  -260
  -359
  -481
  -628
  -803
  -1,007
  -1,241
  -1,506
  -1,801
  -2,127
  -2,485
  -2,872
  -3,288
  -3,734
  -4,207
  -4,708
  -5,236
  -5,791
  -6,372
  -6,978
  -7,611
  -8,270
  -8,956
  -9,669
  -10,411
  -11,181
  -11,982
  -12,814
  -13,678
Prev. year cash balance distribution, $m
 
  349
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  143
  129
  134
  130
  112
  77
  21
  -58
  -164
  -299
  -465
  -662
  -893
  -1,155
  -1,450
  -1,777
  -2,135
  -2,522
  -2,938
  -3,383
  -3,854
  -4,351
  -4,873
  -5,421
  -5,992
  -6,588
  -7,209
  -7,854
  -8,524
  -9,219
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  137
  118
  117
  107
  87
  56
  14
  -36
  -94
  -157
  -221
  -283
  -339
  -388
  -426
  -452
  -464
  -464
  -452
  -430
  -399
  -361
  -319
  -276
  -233
  -192
  -155
  -122
  -93
  -69
Current shareholders' claim on cash, %
  100
  50.0
  34.7
  24.1
  16.8
  11.8
  8.3
  5.9
  4.2
  3.0
  2.1
  1.5
  1.1
  0.8
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Wayfair Inc. (Wayfair) offers browsing, merchandising and product discovery for a range of products from various suppliers. The Company operates through two segments: U.S. and International. The U.S. segment consists of amounts earned through product sales through the Company's five sites in the United States and through sites operated by third parties in the United States. The International segment consists of amounts earned through product sales through its international sites. It has an online selection of furniture, decor, decorative accents, housewares, seasonal decor and other home goods. As of December 31, 2016, it had offered five sites, including Websites, mobile-optimized Websites and mobile applications: Wayfair, Joss & Main, AllModern, DwellStudio and Birch Lane. Wayfair is an online destination for all things home. Birch Lane offers a collection of furnishings and home decor. Its sites feature certain products under its house brands, such as Three Posts and Mercury Row.

FINANCIAL RATIOS  of  Wayfair Cl A (W)

Valuation Ratios
P/E Ratio -30.9
Price to Sales 1.8
Price to Book 75.8
Price to Tangible Book
Price to Cash Flow 95
Price to Free Cash Flow -92.1
Growth Rates
Sales Growth Rate 50.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 106.5%
Cap. Spend. - 3 Yr. Gr. Rate 51.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 36.7%
Total Debt to Equity 36.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -26.6%
Ret/ On Assets - 3 Yr. Avg. -26.1%
Return On Total Capital -110.5%
Ret/ On T. Cap. - 3 Yr. Avg. -73.9%
Return On Equity -120.5%
Return On Equity - 3 Yr. Avg. -77.2%
Asset Turnover 4.6
Profitability Ratios
Gross Margin 20.1%
Gross Margin - 3 Yr. Avg. 20%
EBITDA Margin -4.1%
EBITDA Margin - 3 Yr. Avg. -5.2%
Operating Margin -5.8%
Oper. Margin - 3 Yr. Avg. -6.9%
Pre-Tax Margin -5.7%
Pre-Tax Margin - 3 Yr. Avg. -6.8%
Net Profit Margin -5.7%
Net Profit Margin - 3 Yr. Avg. -6.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

W stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the W stock intrinsic value calculation we used $3380 million for the last fiscal year's total revenue generated by Wayfair Cl A. The default revenue input number comes from 2016 income statement of Wayfair Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our W stock valuation model: a) initial revenue growth rate of 42.7% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for W is calculated based on our internal credit rating of Wayfair Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Wayfair Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of W stock the variable cost ratio is equal to 103.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for W stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Wayfair Cl A.

Corporate tax rate of 27% is the nominal tax rate for Wayfair Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the W stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for W are equal to 5.3%.

Life of production assets of 3.2 years is the average useful life of capital assets used in Wayfair Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for W is equal to -12.7%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $79 million for Wayfair Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 89.74 million for Wayfair Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Wayfair Cl A at the current share price and the inputted number of shares is $6.3 billion.

RELATED COMPANIES Price Int.Val. Rating
WSM Williams-Sonom 49.88 60.71  buy
RH RH 79.62 109.09  str.buy
BBBY Bed Bath&Beyon 21.22 100.12  str.buy
HOME At Home Group 21.73 46.12  str.buy
AMZN Amazon.com 1,006.34 538.53  sell
HVT Haverty Furnit 23.75 17.11  sell
KIRK Kirkland's 11.86 23.95  str.buy
EBAY eBay 37.77 39.07  hold
OSTK Overstock.com 30.30 9.38  str.sell
HD Home Depot 164.22 103.28  sell

COMPANY NEWS

▶ What's Happening With Wayfair? Cramer's Top Takeaways   [Sep-29-17 06:35AM  TheStreet.com]
▶ Cramer's position on Wayfair   [06:56PM  CNBC Videos]
▶ Wayfair Unveils Real-Time Furniture Delivery Tracking   [Sep-26-17 08:46AM  Business Wire]
▶ ETFs with exposure to Wayfair, Inc. : September 25, 2017   [Sep-25-17 10:47AM  Capital Cube]
▶ Bed Bath and Beyond (BBBY) Stock Is Set to Plummet   [Sep-21-17 07:35AM  InvestorPlace]
▶ 3 Stocks That Could Soar More Than Amazon   [Sep-14-17 11:00AM  Motley Fool]
▶ ETFs with exposure to Wayfair, Inc. : September 14, 2017   [Sep-13-17 09:47PM  Capital Cube]
▶ Is Amazon.com, Inc. (AMZN) the Savior of Middle America?   [Aug-24-17 01:43PM  InvestorPlace]
▶ Wayfair, Inc. Value Analysis (NYSE:W) : August 21, 2017   [Aug-21-17 07:57PM  Capital Cube]
▶ 3 Stocks That Look Just Like eBay in 1998   [Aug-16-17 09:35PM  Motley Fool]
▶ 5 High-Flying Stocks You Should Buy Anyway   [Aug-14-17 03:12PM  Motley Fool]
▶ Why Were Investors Selling Wayfair Stock Tuesday?   [Aug-11-17 07:58PM  Motley Fool]
▶ Why Netflix and Wayfair Could Keep Falling   [Aug-10-17 02:00PM  TheStreet.com]
▶ Wayfair reports 2Q loss   [06:05PM  Associated Press]
▶ Wayfair Inc Had a Blowout Quarter   [02:49PM  Motley Fool]
▶ Wayfair Reports Accelerating Sales Growth   [05:14AM  Investor's Business Daily]
▶ 5 Earnings Charts You Have to See   [Aug-07-17 07:44PM  Zacks]
▶ Forget Costco: These 3 Stocks Have Doubled This Year   [Jul-28-17 07:36PM  Motley Fool]
▶ The 3 Stocks on the MFM Team's Radar This Week   [Jul-18-17 06:40PM  Motley Fool]
▶ 3 Stocks That Feel Like Priceline in 1999   [Jul-14-17 05:31PM  Motley Fool]
▶ Why Wayfair Inc. Stock Has Soared 116% This Year   [Jul-12-17 10:50PM  Motley Fool]
▶ Why Wayfair Jumped 22% in June   [Jul-11-17 09:43AM  Motley Fool]
▶ How Overstock.com Shares Rose 16% in June   [Jul-06-17 09:27PM  Motley Fool]
▶ Is TJX Companies About to Lose Its Golden Touch?   [Jun-28-17 10:42AM  Motley Fool]
▶ 1 Stock That Reminds Me of Amazon in the Beginning   [Jun-22-17 06:04PM  Motley Fool]
▶ Why Overstock.com, Inc. Stock Fell 19% in May   [Jun-18-17 03:45PM  Motley Fool]
▶ These 3 Stocks Could Have Doubled Your Money This Year   [Jun-15-17 04:05PM  Motley Fool]
▶ Wayfair Stock: Next Stop, $87?   [Jun-14-17 10:07AM  Motley Fool]
▶ Why Wayfair Inc. Stock Popped 37.7% in May   [Jun-08-17 08:30PM  Motley Fool]
Financial statements of W
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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