Risk/Reward Rating: Negative
Wish (ContextLogic), a mobile ecommerce platform, grew revenue 75% in Q1 2021 which led to a 174% increase in losses as measured by free cash flow. Of particular concern is that revenues are expected to grow only 2% to 4% in Q2 of 2021 versus last year while cash outflows continue. The cash outflow was -$354 million in Q1 2021 versus -$129 million last year.
The company was founded in 2010. After a decade plus of operation one would expect a sustainable business model to be producing increasing free cash flow rather than increasing cash outflows.
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