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Wayfair Falls Despite Strong Q2 Results

Wayfair's strong quarter may already be priced into the stock, which has gained more than 250% over the past three months.

Shares of e-commerce company Wayfair  (W) - Get Wayfair, Inc. Class A Report were falling Wednesday morning despite the company's strong second quarter beats as revenue in the period rose 84%. 

The Boston-based company reported earnings of $3.31 per share, more than three times better than analyst estimates of 95 cents per share. Revenue of $4.3 billion topped estimates of $4.04 billion. 

"The second quarter was a very strong period for Wayfair. Our strategic long term investments positioned us well to serve our customers and to quickly adapt during a challenging time. We experienced unprecedented demand in Q2 and saw record numbers of new and repeat customers choose Wayfair," CEO and co-founder Niraj Shah said. 

The company boasted of generating over $1 billion in free cash flow in the quarter as the company begins to "pair our strong growth characteristics with consistent profit delivery." 

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Wayfair's strong quarter may have already been priced into the stock price, however, as the stock has already jumped more than 230% year to date, including a 270% increase over just the past three months. 

The coronavirus lockdown has certainly played a part in the stock's recent gains as lockdown procedures and social distancing measures has forced many consumers to turn to e-commerce for their shopping needs. 

"Looking forward, together with our suppliers, we remain committed to being the best solution for our customers as they seek comfort in their homes," Shah said. 

Wayfair shares were down as much as 6% at some points in premarket trading Wednesday and were down 1.8% to $285 at last check.

In May, analysts at Citi downgraded the stock to sell, calling it "overvalued" as the cost to maintain order volume will continue to increase as more people shop from home.