Wayfair (W) is entering a new phase of accelerating profitability and cash flow, despite a sluggish home goods sector, Oppenheimer said Wednesday in a report.

"The unique and highly leverageable Wayfair business model remains in the early stages of positive inflection, and the shares continue to enjoy significant room to run," the report said.

Oppenheimer projects adjusted earnings before interest, taxes, depreciation and amortization of $707 million in 2025, with a new forecast of $955 million for 2027, driven by cost reductions and tighter advertising spending.

"The enterprise is already delivering outsized profitability and cash generation, suggesting prospects for even stronger trends as macro headwinds subside," Oppenheimer said.

Free cash flow in 2026 is expected to reach $420 million. the report said.

Oppenheimer raised its 12- to 18-month price target on Wayfair stock to $144 from $100 and reiterated its outperform rating.

Wayfair share rose 1.5% in recent Wednesday trading.

Price: 112.22, Change: +1.68, Percent Change: +1.52