WISH stock forecast: can the platform operator rebound?
Read our analysis for a close look at WISH stock news, the company’s new projects, its financial position based on recent earnings releases and latest price forecasts.
WISH stock analysis: ContextLogic’s one-year performance
ContextLogic’s shares plunged by 92.4% over a 12-month period to 27 January 2022, and the Nasdaq Composite, where the stock is listed, edged up nearly 1% during the same period. The company had a market capitalisation of $1.48bn as of 31 January, according to CompaniesMarketCap.
The stock hit an all-time high of $31.19 on 1 February 2021 but has been gradually slipping since then, owing to its declining profitability through the first nine months of the year. At the time of writing, on 31 January 2022, the stock price stood at $2.31.
A string of changes to the top-tier management of ContextLogic could also have had an impact in major decision making within the company. On 12 July 2021, ContextLogic appointed Farhang Kassaei, former senior director at Google, to the newly created role of chief technology officer. In August, the firm appointed Tarun Jain to the newly-created position of chief product officer. Jain was a former product leader from Google.
Later that year, on 10 November, the company named Vivian Liu as its new chief financial officer. Finally, ContextLogic’s chief executive officer Piotr Szulczewski stepped down on the same day as Liu’s appointment as CFO. His last day at the company will be 1 February 2022.
Stock fundamental analysis: latest earnings
ContextLogic reported financial results for the third quarter ending 30 September 2021 in November 2021. The company’s net loss narrowed to $64m for that quarter from $99m a year earlier. But in the first nine months of the year, the net loss widened to $303m from $176m.
ContextLogic’s revenue plunged 39% in Q3 to $368m from $606m from the same period the previous year. Taking a close look at the company’s businesses, it seems that sales were largely dragged by the marketplace segment, which declined 52% during Q3 from a year earlier.
However, in the first nine months of 2021, the company’s sales rose 3% to $1.80bn from $1.75bn in the same period in 2020. The revenue was reported on a negative free cash flow in the January to September 2021 period, which stood at $903m, swinging from a positive free cash flow of $23m a year earlier.
The company’s logistics segment was the only part of the business that reported a rise in revenue, amounting to 101% over the nine-month period, while the marketplace segment incurred a loss of 18%.
Given the data, it appears that the company’s business segments aren’t exactly profitable. This lack of profitability could be the primary reason behind the stock price’s decline of more than 92% over the past year.
ContextLogic stock technical analysis: technical indicators
According to TradingView, the relative strength index (RSI) of the ContextLogic stock was pointing to ‘neutral’ at 33.70. The RSI of a stock lies between zero and 100. An RSI reading of more than 70 is considered ‘overbought’; it is considered ‘oversold’ or ‘undervalued’ when below 30.
The stock’s commodity channel index (CCI) (20) considered the security a ‘neutral’ based on a reading of -90.25. The commodity channel index is a momentum-based oscillator that weighs the current mean price against the average mean price over 20 periods. A reading of negative to near zero to more than 100 may indicate an upward tendency in the stock’s price.
However, the stock’s moving average convergence divergence (MACD) level (12, 26), deemed the stock a ‘buy’ based on a reading of -0.29, according to TradingView data. The MACD is a momentum indicator where the reading is obtained by deducting the 26-period exponential moving average (EMA) from the 12-period EMA.
Factors that may influence the WISH stock ahead
Although the company announced only a handful of major partnerships and collaborations last year, some of them do appear promising and may boost the firm’s financial position.
The company entered a two-year partnership with Paris-based PrestaShop, a leading e-commerce platform, in June 2021. The partnership has allowed more than 300,000 merchants and brands on the PrestaShop platform to sell their products on the Wish marketplace.
In October 2021, ContextLogic announced a partnership with Spain’s state-owned carrier Correos to help the country’s merchants process orders faster and more efficiently within a completely trackable system.
Let’s take a look at analysts’ ratings and sentiment for the Wish stock, along with the Wish stock price targets.
ContextLogic (WISH) stock outlook: analysts’ sentiments
Analysts’ ratings compiled by MarketBeat shared numerous price targets for the ContextLogic stock. The consensus rating was ‘hold’ based on 12 analyst views as of 31 January 2022.
Out of the 12 analysts covering the stock, four rated it as a ‘buy’, five rated it a ‘hold’, while the remaining three rated it a ‘sell’. These analysts derived from UBS Group, Citigroup, Credit Suisse Group, Loop Capital, Bank of America and Goldman Sachs, among others. The analysts’ consensus 12-month WISH stock price target was $9.95 and had an upside potential of 330.93% based on the current stock price. The stock projection varied from the low price target of $4 to a high of $22.
Out of the most recent ratings, the UBS Group downgraded the stock from buy to neutral, with a price target of $4 and an upside of 19.40%. Citigroup also lowered its price target for the Wish stock from $7.50 to $5.50, with an upside of 15.30% while keeping the outlook neutral.
According to the algorithm-based WISH share price forecast from Wallet Investor as of 31 January, Wish stock could reach a maximum price of $3.89 by the end of December 2022. The service suggested the stock could be valued at $6.38 by the end of December 2023 and $8.91 by the end of 2024. The WISH stock forecast for December 2025 was $9.64.
Wallet Investor did not provide price targets for 2030, but the service’s long-term Wish stock future price suggests it could reach $12.17 in December 2026 and $13.86 in January 2027.
When looking at WISH stock price prediction, it’s important to bear in mind that analysts’ forecasts can be wrong. Projections are based on making fundamental and technical studies of the Wish stock performance. Past performance is no guarantee of future results.
It is important to do your own research, and remember that your decision to trade depends on your attitude to risk, your expertise in the market, the spread of your investment portfolio and how comfortable you feel about losing money. Remember, you should never invest money you cannot afford to lose.
FAQs
Is WISH a good stock to buy?
According to Wallet Investor, the stock is an ‘awesome’ long-term investment over one year.
Why has the WISH stock price been going down?
The company’s deteriorating profitability is the major reason behind the stock’s plunge of more than 92% over a one-year period.
Will WISH stock go up or down?
The stock is likely to go up in the future, based on algorithm-based analysis. However, based on a fundamental study of the company’s earnings in the first nine months of 2021, which was the latest available data, the stock’s performance may not be up to the mark.
How high can the WISH stock go?
According to Wallet Investor, WISH stock may reach $13.86 in January 2027.
When to buy WISH stock?
It could be a good time to buy the stock right now, since it was at $2.31 at the time of writing on 31 January 2022. However, remember that stock prices can go down as well as up and markets are quite jittery at the moment.
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