A Reality Check for Wayfair

The game of growing revenue by burning cash can’t go on forever and investors don’t want to be there at the end.

Elizabeth Winkler

Feb. 22, 2018 3:09 p.m. ET

Investors have been feverishly pushing up Wayfair Inc.’s stock despite the company’s growing losses, worsening free cash flow and surging marketing spending. That run may finally be coming to an end.

On Thursday, the company reported fourth-quarter earnings that sent the stock tumbling more than 20%. Though revenue came in at $1.44 billion, beating estimates of $1.36 billion, Wayfair posted an adjusted loss of 58 cents a share, falling short of the expected 52-cent-a-share loss, and worse than last year’s 34-cent loss.

...