Anyone who has ever tried to find a makeup dupe or a really cheap every day-use item will be familiar with Wish. Context logic, the company behind the e-commerce platform, announced its second-quarter revenue on Aug. 12, falling $67 million short of analyst expectations.
Meanwhile, the company’s revenue fell by 6%, resulting in a loss of $111 million, or $0.18 per share, according to The Motley Fool. Wish’s monthly active users have dropped to 52 million in the last year, while the average time spent on the platform has decreased by 15%. These factors contributed to a drop in the stock price of Wish.
However, prior to the release of the quarterly report, some experts predicted that ContextLogic Inc. stock would make a comeback, and some investors want to know if it’s a good buy. This article is a full guide and would answer your question on whether wish stock buy or sell.
What is Wish?
Wish is an e-commerce platform that sells everything from cosmetics and clothing to electronics and gadgets. According to The Motley Fool, the website caters to buyers from over a hundred countries, though the majority of merchants are from China.
Since merchants are located so far away from many of their customers, deliveries can be time-consuming and costly. This is one reason why the website’s popularity has declined in the last year.
Furthermore, customers have complained about the low quality of the products, according to The Motley Fool. “As we improved logistics, product-quality issues became the number one reason for customer service requests,” CEO Piotr Szulczewski stated in the company’s second-quarter shareholder letter for 2021.
“We are now prioritizing products and merchants that receive positive ratings and feedback from our users under a new quality score system.” This is seriously making people reconsider whether wish stock buy or sell.
How Much Is Wish Worth?
On September 23, ContextLogic Inc. stock opened at $5.97 and closed at $6.14, giving the company a market capitalization of $3.85 billion.
Wish’s discount marketplace served over 100 million monthly active users (MAUs) when it went public last December, primarily allowing Chinese merchants to sell their products to overseas buyers.
Wish offered many of its products at lower prices than regional marketplaces such as Amazon, but customers had to wait much longer for their purchases to arrive. Wish’s reliance on Chinese merchants also exposed its customers to low-quality and counterfeit goods, and processing returns took a long time. To top it all off, the trade war, tariffs, and logistical challenges exposed Wish to significantly more risks than larger e-commerce companies.
Read this article: How to Become a Day Trader with $100: Step by Step Guide
How to Buy Wish Stock?
If you want to buy Wish stock and you have checked if wish stock buy or sell, and you have decided it’s a sell, you must first open an account on a trading platform and provide the requested personal information. Then you can purchase as many shares as you want. WISH is the ticker symbol for the company. To break this step down, you should-
- Check out platforms for trading stocks. Compare the platform to ensure it is what you really want.
- Create a brokerage account. Fill out an application with your information.
- Confirm your payment information. You must fund your account.
- Investigate the stock. Find the stock – WISH – by name or ticker symbol and research it before deciding if it’s a good investment for you.
- Invest now or later. Use a market order to purchase the desired number of shares, or a limit order to postpone your purchase until the stock reaches the desired price.
- Check on the status of your investment. Tracking your stock can help you optimize your portfolio.
Is Wish Stock a Good Investment?
Some investors may think Wish stock is a good investment because they believe the website will become the next Amazon. However, this may not be the case because Wish’s primary focus is on serving lower-income consumers interested in nonbranded products.
Currently, the stock does not appear to be a good investment because of the company’s consistently low revenue and high stock volatility. Furthermore, in Wish’s quarterly shareholder letter, Szulczewski stated that the company is unlikely to see significant results from changes in its business model until the second half of 2022.
ContextLogic Inc.’s stock currently has many negative signals and is expected to fall in the coming days and weeks. Wish stock is currently rated a sell by Zacks. CNN Business, on the other hand, reports that the stock is regarded as a hold by 11 analysts.
ContextLogic (WISH 2.22 percent), the parent company of e-commerce company Wish, recently reported third-quarter earnings. Wish’s revenue fell 39% year on year to $368 million, falling $6 million short of expectations. However, its net loss shrank from $99 million to $64 million, or $0.10 per share, outperforming expectations by a nickel.
Wish did not provide specific guidance, but did warn that revenue would fall sequentially in the fourth quarter, even after accounting for holiday sales. It also announced that Piotr Szulczewski, its founder and CEO, would step down in February but remain on the company’s board.
During the third quarter, Wish’s last 12-month (LTM) active buyers fell 32% year on year to 46 million. It attributed its ongoing loss of active users, which it expects to continue into the holidays, to lower digital ad spending.
Wish says it’s cutting back on marketing to save money and focus on retaining its higher-value users with new features like shoppable “Wish Clip” videos, new buy now, pay later (BNPL) options with Klarna, and its “Wish Standards” program, which rewards higher-quality merchants with lower commissions and prioritized product listings.
As Wish fades away, other similar platforms, particularly Alibaba’s (BABA 4.43 percent ) AliExpress, will most likely absorb its customers. AliExpress, which also allows Chinese merchants to sell their products to international customers, already has over 150 million active buyers worldwide.
Wish did not provide specific guidance, but did warn that revenue would fall sequentially in the fourth quarter, even after holiday sales were factored in. It also announced that its founder and CEO, Piotr Szulczewski, would step down in February but remain on the company’s board.
Wish’s last 12-month (LTM) active buyers fell 32% year on year to 46 million in the third quarter. It blamed the ongoing loss of active users on lower digital ad spending, which it expects to continue into the holidays.
Wish Stock Buy or Sell?
Wish isn’t yet doomed, but I wouldn’t buy the stock. At these levels, its low valuation and high short interest may limit its downside potential, but there are no compelling reasons for the stock to rally. Instead of Wish, investors looking for undervalued e-commerce stocks should consider Coupang or JD.com, which both operate much stronger businesses.
Wish faces some significant challenges in the near term, but its financial discipline is gradually improving. On adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) basis, its loss of $30 million was a significant improvement from a loss of $64 million the previous year, while its adjusted EBITDA margin increased from a negative 11 percent to negative 8 percent.
Wish will also not run out of money anytime soon. It had $1.2 billion in cash, cash equivalents, and marketable securities at the end of the third quarter, and it expects its free cash flow (FCF) to remain near breakeven this year.
Frequently Asked Questions
The stock fluctuated 14.42 percent during the day, from a low of $2.08 to a high of $2.38. ContextLogic Inc.’s expected opening price is on Wednesday, March 23, 2022.
Out of 9 analysts, 0 (0 percent) recommend WISH as a Strong Buy, 2 (22.22 percent) recommend WISH as a Buy, 5 (55.56 percent) recommend WISH as a Hold, 1 (11.11%) recommend WISH as a Sell, and 1 (11.11%) recommend WISH as a Strong Sell. So whether wish stock buy or sell, it is a sell.
Takeaway for Investors. ContextLogic stock may regain some of its lost value in 2022 as it resumes advertising spending, improves logistics challenges, and improves offered product quality.
WISH traded at all-time lows after reporting disappointing Q2 results amid a slowdown in e-commerce. However, Wall Street believes the stock is undervalued and has significant upside potential. ContextLogic, Inc. stock (WISH) – Purchase ContextLogic, Inc.
The 12-month price projections are currently ranging between $4 and $12. WISH stock is currently trading at 0.79 times trailing sales and 2.51 times book value. These metrics suggest that the stock is undervalued.
They predict that Wish’s revenue will fall 17 percent in 2021, 16 percent in 2022, and possibly 34 percent in 2023 if its turnaround efforts bear fruit. They also expect that it will remain unprofitable, but that its net losses will gradually narrow through 2023.
Conclusions
Wish’s high short interest ratio and unusual operating model keep it popular among retail traders on the social media platform Reddit. The stock has taken investors on a wild ride, rising from $23.55 per share in December of last year to a record-high of $32.85 per share at the end of January. After that, shares fell to $8 in May before regaining 70 percent in June. At the time of writing, shares are priced at $5.24, representing a drop of nearly 80% since the IPO.
The Wish platform connects users to merchants and is a mobile e-commerce company with a presence in the Americas, Europe, and other international markets. It also provides merchants with a marketplace and logistical services.
References
- finance.yahoo.com– Quote wish news
- thestreet.com– Wish stock can it get any worse
- investorplace.com– Is Wish Stock a buy right now
- zacks.com– Wish stock buy or sell
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