Wish Stock: Is It a Good Buy Right Now?
Anyone who has ever tried to find a dupe for a makeup product or buy really cheap everyday-use items would know about Wish. ContextLogic, the company behind the e-commerce platform, shared its revenue for the second quarter on Aug. 12, falling short of analyst estimates by a whopping $67 million.
Meanwhile, the company’s revenue declined 6%, leading to a loss of $111 million, which translates to a loss of $0.18 per share, The Motley Fool reported.
Over the last year, Wish’s monthly active users have declined to 52 million, while the average time people spent on the platform went down by 15%. All these factors contributed to a drop in Wish’s stock price.
However, before the quarterly report was released, some experts forecasted that ContextLogic Inc. stock would make a comeback, and some investors are keen to know if it’s worth the buy.
What Is Wish?
Wish is an e-commerce platform that sells everything from beauty supplies and fashion to gadgets and electronics. The website caters to buyers in over a hundred countries, although most merchants are from China, as noted by The Motley Fool.
With merchants based so far away from many of their consumers, deliveries can be quite time-consuming and expensive. That’s one of the reasons the website’s popularity has decreased in the past year.
Moreover, customers complain about the low quality of products, The Motley Fool reported. “As we improved logistics, product-quality issues became the number one reason for customer service requests,” CEO Piotr Szulczewski said in the company’s shareholder letter for the second quarter of 2021. “Under a new quality score system, we are now prioritizing products and merchants that receive positive ratings and feedback from our users.”
How Much Is Wish Worth?
ContextLogic Inc. stock opened at $5.97 and closed at $6.14 on Sept. 23, giving the company a market capitalization of $3.85 billion.
How and Where To Buy Wish Stock
If you want to buy ContextLogic Inc. stock, sign up to make an account on a trading platform and enter the requested personal information to open your brokerage account. Then you can buy the number of shares you want. The company operates under the ticker WISH.
Is Wish Stock a Good Investment?
Some investors might consider Wish stock a good investment since they believe the website will become the next Amazon. However, that may not be true as Wish primarily focuses on serving lower-income consumers interested in nonbranded products.
Currently, the stock doesn’t seem like a good investment due to the company’s continuously low revenue and high stock volatility. Moreover, in Wish’s quarterly shareholder letter, Szulczewski said the company is not likely to see any significant results from changes in its business model until the second half of 2022.
At the moment, ContextLogic Inc. stock has many negative signals and is expected to fall in the coming days and weeks.
According to Zacks, Wish stock is currently a sell. CNN Business, on the other hand, notes that the stock is considered a hold based on the consensus among 11 analysts.
Keep in Mind
It may be best to keep your hands off ContextLogic Inc. stock for the next year or so as the company’s strategies will take a few quarters to show any tangible results. Doug Anmuth, a J.P. Morgan analyst, said that “the new product strategy could take many quarters to materialize and carries considerable execution risk,” MarketWatch reported.
Data is accurate as of Sept. 23, 2021, and subject to change.
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- Wish. 2021. "Wish Reports Second Quarter 2021 Financial Results."
- Wish. 2021. "Q2 2021 Shareholder Letter."
- MarketWatch. 2021. "Wish dives toward a record low as analyst downgrades after disappointing earnings report."
- The Motley Fool. 2021. "Why Is Everyone Talking About Wish Stock?"