Street Initiates ContextLogic (WISH) Coverage With Mostly Positive Ratings

Wall Street has initiated the coverage of ContextLogic (NASDAQ: WISH), the parent company of Wish, an online e-commerce platform that facilitates transactions between sellers and buyers, with mostly positive ratings.

Numerous firms have started the coverage of WISH with a "Buy" or equivalent rating, including BofA and JPMorgan, while Goldman Sachs is among the group of firms that have preferred to stay on the sidelines.

So far Monday, eight Wall Street firms have launched with Buy ratings and four with Neutral ratings.

BofA analyst Justin Post says he is "constructive on the opportunity" that the e-commerce company offers, therefore rating the stock with a “Buy” rating and $26.00 price target. The analyst says that the US stimulus and a recovering global economy can aid value-conscious consumers.

"Wish is making eCommerce more accessible and affordable, delivering low priced products to 100+ countries from 500k merchant sellers. We are constructive on the opportunity given a mobile-first 2-sided marketplace, initiatives to improve the shipping experience for customers, and opportunity for higher margins," the analyst wrote in today’s note.

"Wish captures a unique audience of 100mn value-conscious MAUs that are under-served by other online marketplaces in the $1.7tn eCommerce market (ex-China & India). Given COVID related shipping disruption, MAUs & sales were impacted in 2H’20, and Wish has easier comps than peers in 2H’21. Lower churn from reduced shipping times, margin efficiencies from bundling in Wish’s logistics platform, and a rebound in ProductBoost ad revenues should add margin growth to complement core eCommerce growth in 2021."

On the other hand, Stifel analyst Scott Devitt initiated the coverage with a “Hold” rating and a $22.00 target price amid profitability concerns.

“Shares have fallen below the initial offering price of $24 and currently trade at a discount to the peer group as debates surrounding the issues of profitability, China related risk, and the user experience and its long term impact to growth are still to play out. We expect the company to grow revenue at a 26% CAGR over the next three years and achieve adj. EBITDA profitability in 2022. While Wish possesses many of the attributes we appreciate in a global marketplace, we hold a neutral view while the current debates have yet to be resolved,” Devitt said in a research note sent to clients today.

WISH stock price trades at $19.80 or 2.7% in the red in pre-open Monday.

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