The Wish stock price surged on Tuesday as interest in the company surged in social media networks like StockTwits and Reddit. The shares rose by more than 50%, valuing the e-commerce company at more than $6.8 billion. The shares are still down by more than 60% from their all-time high of $32.63.
Full Answer
Why is wish stock falling?
Now, there are multiple reasons why WISH stock is falling. On a macro level, there has been a sell-off in growth and tech companies which is weighing heavy on WISH stock. Investors have become increasingly apprehensive of growth names especially those which are posting losses and don’t have any clear-cut path to profitability.
What is the target price for wish stock?
According to the data compiled by TipRanks, WISH stock has an average target price of $20.71, which is a premium of 153 percent over the current prices. Its highest target price is $30.
Is wish a good stock to add to your portfolio?
While WISH might not be another Amazon, it could be a good e-commerce stock to add to your portfolio. The stock looks like a good long-term investment for growth investors.
Should you worry about Wish Inc's (WISH) valuation?
Though Wish certainly has a compelling valuation given its current growth, there are a few concerns investors should keep an eye on. In its most recent quarter, Wish spent more than 100% of its gross profit on sales and marketing expenses even though the company's customer count declined.
Is Wish stock Expected to Rise?
ContextLogic Inc (NASDAQ:WISH) The 5 analysts offering 12-month price forecasts for ContextLogic Inc have a median target of 2.00, with a high estimate of 7.60 and a low estimate of 1.50. The median estimate represents a +11.11% increase from the last price of 1.80.
Why did Wish stock jump?
ContextLogic (WISH +7.2%) shares rose after the company reported an earnings beat Wednesday afternoon. The earnings beat was primarily due to disciplined spending, as the company significantly cut back digital ad spending while focusing on user retention.
Is Wish stock a good investment?
When you look at all of the factors, it is clear that Wish Stock is not a good investment option. The company is unprofitable and has a high debt-to-equity ratio, and its earnings are disappointing.
What happens to Wish stock?
Investor sentiment is still bearish The percentage of the WISH's float being shorted between October and November 2021 reached 30%, which is considered quite high. See the red line on the chart below. Figure 2: The percentage of the WISH's float being shorted between October and November 2021 reached 30%.
Is Wish a good stock to buy 2022?
Is CONTEXTLOGIC Stock a good buy in 2022, according to Wall Street analysts? The consensus among 8 Wall Street analysts covering (NASDAQ: WISH) stock is to Hold WISH stock.
Why is Wish stock doing so poorly?
“After a strong start to the second quarter of 2021, demand slowed due to a number of headwinds,” Szulczewski wrote in the first sentence of the letter published late Thursday, alongside Wish's earnings report. Wish shares plunged 20% on Friday and continued sliding on Monday, dropping another 9% to close at $6.87.
Will Amazon Buy WISH?
Alibaba and Amazon have had acquisition talks with Wish in the past year. One person close to top players at Wish says Amazon recently offered $10 billion in cash to buy the company, and Wish's CEO walked away.
Will WISH stock bounce back?
Despite Bad News, WISH Stock Is Bouncing Back Slashing its marketing spend, it's no surprise it saw revenues for the holiday quarter fall 64% year-over-year. While net losses were down year-over-year, negative free cash flow in fourth-quarter 2021 (-$50 million) was double what it was for Q4 2020 (-$25 million).
Is WISH stock undervalued?
WISH shares trade at 0.79 times trailing sales and 2.51x book value. These metrics imply that the stock is relatively undervalued.
Does Wish recover?
In other words, WISH stock will continue to fall, and there seems to be no end in sight for its decline. This is because ContextLogic will likely keep posting negative free cash flow and burning through its cash. Until the market sees an end to this situation, WISH stock likely won't recover.
Who is behind Wish com?
founder Peter SzulczewskiWish founder Peter Szulczewski in his headquarters office in San Francisco. “Forty-one percent of U.S. households don't have $400 worth of liquidity,” Szulczewski says, referring to the Fed's latest estimate.
Will WISH stock bounce back?
Despite Bad News, WISH Stock Is Bouncing Back Slashing its marketing spend, it's no surprise it saw revenues for the holiday quarter fall 64% year-over-year. While net losses were down year-over-year, negative free cash flow in fourth-quarter 2021 (-$50 million) was double what it was for Q4 2020 (-$25 million).
Is WISH a pump and dump?
Also, don't forget WISH is a penny stock prone to pump and dumps.
Is WISH stock undervalued?
WISH shares trade at 0.79 times trailing sales and 2.51x book value. These metrics imply that the stock is relatively undervalued.
Is WISH a shorted stock?
As of May 15th, investors have sold 49,560,000 shares of WISH short. 9.94% of ContextLogic's shares are currently sold short. Learn More on ContextLogic's current short interest.
Wish Stock Analysis
Looking at Wish’s stock chart, you would assume it’s a failing company. After an initial run, the graph looks like a downward ski slope, with Wish stock price dropping basically all year.
Disappointing Q3 Earnings for Wish Stock
Not only did the company announce its CEO is leaving, but their Q3 result shows the marketplace is losing ground.
The Turnaround Strategy
Part of Wish’s plan to turn things around is cutting back on ad spending to focus on its existing users. The company is planning to study repeat customers to learn the products they are buying. This way, they can promote better quality items. That said, the turnaround plan consists of two primary points:
Wish Stock Forecast – Where Do We Go From Here?
With Wish stock down 80% this year, will it sink lower? Or, will it finally break out of its downtrend?
NASDAQ: WISH
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What happened
Shares of e-commerce and logistics company ContextLogic ( WISH -6.47% ), commonly called Wish, plunged 16.6% in December, according to data provided by S&P Global Market Intelligence. The month started with an analyst downgrade, which caused the stock to fall.
So what
The tough times for Wish started on Dec. 2 when Kunal Madhukar, an analyst with UBS, downgraded the stock from buy to neutral, according to The Fly. To summarize, Madhukar believes revenue will be challenged in 2022 and expenses will remain high. In other words, what plagued Wish in 2021 could continue to affect it in 2022.
Now what
If there's a silver lining, it's that Wish still has over $1 billion in cash, which is a lot to work with. And perhaps leadership changes could actually be a good thing. Fresh eyes on the business might lead to new perspectives and more profitable pursuits.
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Where Things Stand With ContextLogic
On Aug. 12, ContextLogic reported that revenue fell 6% year-over-year (YoY), a disturbing anomaly for an online e-commerce company. Moreover, the company’s losses skyrocketed to $111 million from negative $11 million last year.
Where This Leaves ContextLogic
Analysts have become decidedly negative on WISH stock. For example, JPMorgan just downgraded the stock from Overweight to Underweight and lowered its price target from $17 to $5 per share. In addition, four other major brokerage firms made the same switch on Aug. 13 from Overweight to Underweight, according to Yahoo! Finance.
What To Do With WISH Stock
Investors should be careful with WISH stock. I was already too early in calling for it to rise. With the disastrous Q2 results, it looks like it is going to take some time for ContextLogic to get a handle on its growth issues.
The e-commerce underdog will face an uphill battle to stay relevant
Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Follow him on Twitter for more updates!
2022-2023: Addressing the near- to mid-term challenges
Wish ended the third quarter of 2021 with $1.2 billion in cash, cash equivalents, and marketable securities. That was down 43% from $2.1 billion a year ago. Its net loss also widened year over year, from $176 million to $303 million, in the first nine months of 2021.
2024-2025: Securing new partnerships
If Wish can turn around its core business, it will need to gain more allies to widen its moat against Alibaba 's ( NYSE:BABA) AliExpress, which also enables Chinese merchants to sell cheap products to overseas buyers.
2026 and beyond: Carving out a defensible niche
If Wish can overcome its near-term challenges and secure more partnerships to widen its moat, it might carve out a defensible niche by 2026.
How much of Wish's profit is spent on sales?
In its most recent quarter, Wish spent more than 100% of its gross profit on sales and marketing expenses even though the company's customer count declined. Since Wish has roughly $1.8 billion in cash and equivalents on its balance sheet, it's logical that the company is pouring money into growth-related initiatives.
What is a wish?
Wish is a mobile-first e-commerce marketplace designed primarily for cost-conscious consumers. The company offers some of the cheapest listings of any marketplace worldwide and buyers are often willing to sacrifice a bit of quality in exchange for the platform's cheaper prices.
How long does it take for Wish to ship?
Wish's time to delivery is reported to be anywhere from 15 to 45 days with that number growing even larger amid the pandemic due to shipping struggles.
Is Wish a parent company?
ContextLogic ( NASDAQ:WISH), the parent company of the Wish e-commerce marketplace, made its market debut last December. But after less than six months on the public markets, the company's stock is already down more than 70% from its highs. Despite consistently growing its revenue, the company has been plagued by losses, ...
Why is WISH stock going down?
Before we analyze whether WISH stock can recover, let’s first see why the stock has been in a freefall. WISH stock has been going down for multiple reasons. It has been the victim of the sell-off in growth names. Company-specific factors, including the resignation of its CFO Rajat Bahri, didn't help matters.
WISH stock forecast
Analysts went on a downgrading spree after ContextLogic reported its second-quarter earnings. Currently, it has two buy ratings, six hold ratings, and two sell ratings from the analysts polled by TipRanks. Its average target price of $9.81 represents an upside potential of over 50 percent from these levels.
Will WISH stock recover?
The worst seems to be over for WISH stock and it should recover soon. While the second-quarter earnings were a disaster, there was a silver lining. ContextLogic is cutting down on advertising expenses and will focus on retaining existing users.
Will WISH stock go back up?
WISH stock seems to have bottomed and should go up. Especially if you're willing to take a long-term view, the stock should go back up. The company is an e-commerce play and currently trades at a tempting valuation with an NTM EV-to-sales multiple of only 1.2x.
Can Reddit and WallStreetBets take ContextLogic stock higher?
WallStreetBets has been successful in triggering a short squeeze in many stocks. While most of them tumbled from the highs, most settled at a higher price level. Now, WISH doesn't have a loyal army of shareholders like GameStop and AMC Entertainment.
Why is Wish stock falling?
On a macro level, there has been a sell-off in growth and tech companies which is weighing heavy on WISH stock. Investors have become increasingly apprehensive of growth names especially those which are posting losses and don’t have any clear-cut path to profitability.
How much is Wish worth?
Currently, WISH has a market cap of just over $5 billion, while it has around $1.8 billion as cash on its balance sheet. This means an enterprise value of around $3.3 billion. Analysts expect ContextLogic to report revenues of $3.2 billion in 2021 and $3.8 billion in 2022.
When did Wish go public?
ContextLogic (WISH), which went public in December 2020 , is having a hard time. It had a lackluster listing and the shares closed at $20.05 on the listing day after opening at $22.75. The company priced the IPO at the upper end of the range at $24. Why is WISH stock falling and should you buy the dip now?
