Photo sharing company Snap (NYSE:SNAP) was one of the stock market’s biggest losers in 2018. It was also one of the biggest losers in 2017. Calendar 2019 is shaping up to be different, with Snap stock already up 16% year-to-date. But, in its first few days of trading in 2017 and 2018, SNAP also traded sharply higher.

In other words, don’t let the early 2019 rally in SNAP fool you. This is just a dead cat bounce. In all likelihood, the rally will be faded, and Snap stock will continue on its losing streak in 2019.

At its core, Snap is still richly valued, the fundamentals are weak and only getting weaker, and the optics from multiple C-suite shakeups are pretty bad. Bad optics, a big valuation, and weak fundamentals normally are a recipe for disaster for a stock.

Snap is no exception here. There is a slim chance this company stages a huge turnaround and the stock doubles overnight, but the likelihood of that happening is very small. Meanwhile, the likelihood of SNAP dropping to fresh all time lows in 2019 is very high.

Desperate Companies Do Desperate Things

You’ve heard the saying, “desperate people do desperate things,” the same is true for companies. Desperate companies do desperate things.

Right now, Snap is thinking about doing arguably the most desperate thing the company could do: making ephemeral Snaps last longer, or maybe even forever. That’s a sharp pivot from the company’s core ideology over the past several years.

This company was built on ephemeral messages and content, and through all the adversity the company has faced over the past several years, management has consistently stuck to that core ideology.

Until now.

Presumably, the idea behind creating longer-lasting Snaps is that Snap’s content could then be broadcast outside of the app, increasing reach and relevancy. Advertisers would also be more attracted to advertising next to longer lasting content. Plus, engagement might go up, since this blend of ephemeral and permanent has powered Instagram to 1 billion users.

But, those are all potential outcomes. Right now, the reality is that Snap is thinking about breaking from its core ideology, and that’s a sign that things at the company must be really bad.

These Are Desperate Times for Snapchat

Across the board, things are not going well for Snap.

The user base is in decline. ARPU growth has rapidly decelerated. So has revenue growth. Advertisers aren’t flocking to the platform, even with lower ad prices. Cash burn is a problem. Profitability is a long shot. Multiple executives, including a CFO of less than a year, have left the company amid growing uncertainties surrounding the platform’s future.

None of that is good news. None of it projects to turn into good news in 2019, either.

According to Piper Jaffray’s Taking Stock With Teens survey, Instagram took over Snapchat as the most popular app for U.S. teenagers in late 2018. Meanwhile, Google Trends indicates that Instagram’s digital relevance continues to grow in the U.S., while Snapchat’s continues to fall. The same is true on the international front.

Perhaps that’s why ad buyer intentions on Snapchat remain very low, according to a Cowen survey, and why less than a third of U.S. marketers use Snapchat (versus over two-thirds for Instagram).

All in all, things are bad at Snap, and they don’t project to get better anytime soon.

Profitability Remains a Long Shot

Perhaps the biggest knock against Snapchat is the lack of profits underlying the valuation.

Snap stock trades at a rather ridiculous 8X trailing sales. That is about the same multiple as Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR). But, Facebook and Twitter are both supported by healthy profits and each is growing its daily active user bases.

Snap still runs at huge losses, and the daily active user base is in retreat. To be sure, bulls say the valuation is warranted because of robust revenue growth. But, robust revenue growth will inevitably be short-circuited by a stalled out user base. When that happens, margins will stop improving, and it will become clear that profitability is a long shot.

Consequently, the valuation on Snap stock will crumble, and the stock will fall. Thus, without profits or robust user growth, today’s valuation on Snap stock is ultimately too high.

Bottom Line on SNAP Stock

Snap stock is up more than 15% thus far in 2019, and bulls are saying this year could be different than 2017 and 2018.

It won’t be. The user base isn’t going to turn around anytime soon. So long as it doesn’t, advertisers won’t flock to the platform. Without an influx of advertisers, revenue growth will stall out. As revenue growth stalls out, losses will pile up. Those loses piling up will ultimately drag SNAP lower.

Thus, until usage trends turn a corner, SNAP is a sell.

As of this writing, Luke Lango was long FB and TWTR.