Wow. Wayfair stock (W) has skyrocketed, rally way beyond what even the most bullish of people expected. Absolutely stunning. Wayfair stock really is an enigma here. But is there even more upside ahead? Over at BAD BEAT Investing, our exclusive member only service, we had conversations regarding this name just back in December highlighting it as a possible 2019 play. Absolutely stunning. So what are we seeing now for Wayfair stock?

The huge rally is a direct result of stellar earnings showing gaining market share and stellar earnings. Management issued a cautiously optimistic outlook on the fourth-quarter back in early November, saying sales growth should slow to about 37% from 43% in the prior period. It is true that there is surging competition in the online and physical channels, and the potential for aggressive price-cutting by its peers. But that did not pan out. What happened:

Revenue gains were well above expectations coming in at at 41% for the quarter and 45% for full-year 2018. Wayfair’s engagement metrics nearly all pointed in the right direction, too. There were far more customers too. The active customer count improved to 15 million from 11 million a year ago, repeat business expanded to 66% of the sales base from 62%, and order volume shot up by 51.1% year over year. Average order value ticked lower by $2, but still remained strong at $227. Gross profit margin was 24% of sales in Q4, higher than the 23% expected. Adjusted EBITDA for the fourth quarter was negative $54 million or negative 2.7% of net revenue. Adjusted EBITDA in Q4 for the U.S. business was positive $8 million, and adjusted EBITDA for the international business was negative $62 million. Non-GAAP free cash flow for the quarter was negative $23 million, based on net cash from operating activities of $43 million and capital expenditures of $66 million.

More upside? We don’t think so. In fact, it is a compelling short play. Nothing more stomach churning than doubling a short shooting up, but we think you have to here. Why?

All time highs for a company valued @ 10 billion, with no apparent end to the losses. Flip through their presentation slides for a laugh, no mention of how the company ever makes money anytime in the near future. And a downturn in housing would be a killer for them, not to mention Amazon can crush them like a bug on a whim. This is a classic squeeze, nada to do with the actual value of the company.

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