"We would expect revenue from the Bed Bath & Beyond wind-down to be relatively widely dispersed to the largest competitors in the market like Walmart, Amazon, Target, Wayfair and Williams-Sonoma," Nagle explained in a client note on Monday. "Revenue may also shift more towards brick-and-mortar stores given that 75% of industry sales are offline. However, we believe that Wayfair and Overstock could see a degree of revenue upside from the Bed Bath & Beyond bankruptcy."
Nagle calculated that for every 5% of revenue that leaves Bed Bath & Beyond, Wayfair's sales could increase by 2% as it gains those customers.
As for Overstock, for every 1% of Bed Bath & Beyond revenue that vanishes, Overstock sales could increase by 3% as it also sees an influx of new customers.
Bed Bath & Beyond was slated for about $6 billion in sales in 2023, according to Wall Street estimates.
"We believe that Wayfair and Overstock could see modest revenue upside (and both have experienced a pickup in web traffic recently), although inventory liquidations could be a near-term headwind," Nagle added.
Bed Bath & Beyond declared bankruptcy on Sunday after months of unsuccessful attempts to sell itself and raise capital. The company warned in January it would have difficulty continuing as a "going concern" without some form of life-saving event.
The company will begin offering going-out-of-business sales at its 360 Bed Bath & Beyond and 120 buybuy BABY stores immediately.
Bed Bath & Beyond stock crashed by as much as 31% during Monday's session. Shares of the aforementioned Wayfair declined slightly while Overstock shares were flat.
Forrester Research retail analyst Sucharita Kodali told Yahoo Finance Live that Kohl's, Target, and IKEA will benefit from the disappearance of Bed Bath & Beyond.
"I think IKEA is going to do well," Kodali said. "They are continuing to open stores and they are trying to do some smaller format stores. All of those Bed Bath & Beyond employees, I think, are great candidates to potentially be employed at some of those other stores."
Yahoo Finance's Josh Schafer contributed to this story.