Even though Wayfair (W) posted a strong prior quarter due to the transition to e-commerce and also its first quarterly profit in years, it's tacked with an 18.6% chance of one-year default and a 24% chance of two-year default per S&P Global with an implied rating of CCC, putting it on spot 8 of the top 15 most vulnerable retailers. And although Wayfair's growth has been recognizable and turbocharged during the pandemic, the sustainability of that growth is inherently weak.

During the previous quarter, Wayfair posted revenues of $4.3 billion, up 83.7% YoY, and net income of $273.9 million. Active customers rose to 26 million (46% growth YoY), and repeat customers drove orders up higher, adding 12.7 million to the mix.

And although active customers soared and repeat customer engagement was strong, long-term net revenue per active customer fell 1.6% YoY to $440; average order value also fell 11% YoY to $227. So, while the trends to active users have been strong, order value and revenue per customer have not performed as well - are customers buying less, are prices falling, or is Wayfair having to run promotions and deals to drive orders higher?

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