Wall Street is turning its back on Zulily, the fast-growing Seattle online retailer. Shares of the company tumbled six percent on Friday, sending the stock to levels not seen since its initial public offering in November 2013.
The stock is now stuck at $24.51, and it is down 40 percent so far this year. Zulily went public at $22 per share, but opened on Nasdaq at $39.40. It skyrocketed in February, peaking at $72 per share.
But since then it has been a steady decline for the seller of baby products, housewares and women’s apparel. During the company’s third quarter earnings announcement, Zulily CEO Darrell Cavens detailed an email snafu, which caused the company to cut back on marketing.
Zulily’s stock was hammered after that incident, though Cavens said at the time that the issues had largely been resolved. The company also continues to grow like mad, topping 4,100 employees (including contract warehouse workers) and opening new fulfillment centers (an 800,000 square-foot facility is scheduled for Bethlehem, Pennsylvania).
Even so, Wall Street was disappointed with the company’s performance.
For the third quarter, the company posted revenue of $285 million and active customers of 4.5 million, an increase in both areas of 72 percent over the same period last year.
That’s pretty healthy growth, and not everyone on Wall Street thinks Zulily is a sad story.
PiperJaffray just picked Zulily as one of its top picks for 2015, noting that it could be one of the next disruptors in e-commerce.
“We believe the unfortunate reality that has been the stock price activity post-IPO for each (Zulily) and (Wayfair) presents a very unique opportunity for upside to consumer-minded PMs and analysts interested in picking up
growth ideas at a reasonable price,” they wrote.
