ContextlLogic

ContextLogic Inc. (WISH) Stock Forecast

E-commerce is a market that’s here to stay, and only the strong will survive. San Francisco-based ContextLogic is a mobile e-commerce platform whose mission is to make mobile shipping more affordable and entertaining for billions of people. It’s a marketplace that seeks to match consumers with merchants based on user preferences. 

ContextLogic could be considered a risky play for investors based on fundamentals. It is burning through cash, is not profitable and revenues have been in freefall. ContextLogic is in the early stages of a turnaround that could make or break its future. It is being led by interim CEO Joe Yan after former boss Vijay Talwar left abruptly after only months on the job.

How do we estimate WISH will do in 2023?

The WISH stock forecast for 2023 is somewhat bearish. While the U.S. economy is proving to be more resilient than feared in 2023, the global economy is still experiencing a slowdown. Besides, ContextLogic has some issues of its own to solve. 

In its latest quarterly report, the company reported a 66% drop in revenue vs. the year-ago period to $125 million. Its gross profit fell close to 80%. This should be a warning signal to investors for several reasons, including the likelihood that ContextLogic is losing market share. 

E-commerce is a competitive field in which ContextLogic is up against some stiff competition like Amazon. The company has made turning cash flow positive a priority in 2023, so there could be some improvement there. 

The consensus price target on WISH based on analyst views is $2.78, down nearly 10% from the recent consensus. The estimates range between $1.00 and $5.70 per share, suggesting that the business is a difficult one to assign a value to. Wall Street analysts recommend holding the stock. In addition, since WISH stock fell below $1.00 per share, the Nasdaq has warned it could be delisted if the stock price fails to recover back to that minimum threshold.

How do we estimate WISH will do in 2024?

The WISH stock forecast for 2024 will hinge largely on if the company manages to strengthen its balance sheet. Investors will be looking for a revenue recovery and for the company to stop spending all the revenue that does come in. 

ContextLogic doesn’t have a ton of cash on its balance sheet, at around $587 million prior to liabilities. Unless investors can be assured that things are improving and the company is not at risk of going bankrupt, the stock could remain stuck. 

In our WISH stock forecast, we can presume that ContextLogic will manage to increase its stock price back to the $1 level so that it can continue trading on Nasdaq. In this case, the stock price could very well be trading above the $1 threshold in 2024. In 2022, the stock price neared $3 per share. It’s possible that WISH stock will revisit those levels once again. 

How do we estimate WISH will do in 2025? 

Assuming that ContextLogic undergoes a successful transformation, its stock price could recover in the coming years. It has the wind at its back in terms of e-commerce, a market where sales are predicted to increase by 50% by 2025 to $7.4 trillion.  But it must fix the company’s issues. 

ContextLogic could take a page out of Amazon’s book and become more diversified so that it has more revenue streams to offset its spending. It already showed its willingness to follow Amazon’s lead by adopting a flat-rate shipping model. 

The WISH stock forecast will depend on the company making steps in this direction. Assuming that they are able to right the ship and grow revenues once again, there’s a great deal of potential for a mobile e-commerce stock like WISH. 

By 2025, for a positive WISH stock forecast, the company must have made strides toward improving its user experience and signing up more partner merchants. If it is successful, there’s no reason why WISH couldn’t trade similarly to competitor Amazon at roughly twice its sales for the year.  

How do we estimate WISH will do in 2030? 

By 2030, the e-commerce market is projected to be worth $18 trillion. If this ferocious growth takes place, WISH stock could be a key beneficiary of this momentum. 

But again, the WISH stock forecast hinges on the results of the company’s turnaround plan. Amazon’s revenue CAGR ratio is in the double-digit percentage range. If ContextLogic could achieve a similar revenue CAGR, its stock price has a greater chance of rising in 2030. 

By 2030, ContextLogic should have sorted out its management shakeup and potentially have a new CEO in place with a strategy for growth. One thing that ContextLogic has going for it is that it is not saddled with debt on its balance sheet. That alone is not enough to save a lagging stock price, but it is a start. 

In addition, if the macroeconomic conditions prove to be solid in the new decade, this could benefit e-commerce stocks like WISH because consumers are more likely to spend money. 

FAQ

Who are ContextLogic’s biggest competitors?

The company competes against other major e-commerce platforms like Amazon, Alibaba, Shein and Shopify in addition to discount retailers such as Target and Walmart, among others.

When did ContextLogic begin trading in the public markets?

The company had its IPO on Dec. 16, 2020 and trades on the Nasdaq under the symbol WISH. The company was founded in 2010.

Is ContextLogic a profitable company?

As of the third quarter of ContextLogic’s fiscal year 2022, the company was not profitable and reported a net loss of $124 million. Amazon was similarly not profitable for many years.

Is ContextLogic a good investment in 2023 and beyond?

ContextLogic is in the early stages of a turnaround, which is not easy. Wall Street analysts are cautious about the stock. If the company is able to increase its revenues as analysts expect, and the economic outlook improves, it could pay off as an investment.