(NYSE: W) stock has been on a tear lately, having sailed past the market's 15% return through early July. There's potentially room for much bigger gains ahead, too. The stock remains down by over 70% from its pandemic high, after all, and the picture is brightening around economic growth in its key U.S. market.

Investors should be extremely cautious about buying into that rebound thesis, though. While the company maintains a premium position in an attractive e-commerce niche, customer-engagement trends aren't pointing to a solid recovery any time soon. Let's take a closer look.

Wayfair announced in early May that sales fell 7% globally but declined by only 5% in the core U.S. market. That result marked an improvement over the 11% drop that the company endured for the full fiscal 2022 year. It helped spark a rally in the stock, which has risen over 80% so far in 2023.

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Source Fool.com