Square (NYSE:SQ) has hit new all-time highs for four consecutive trading days, and that's not the only winning streak it's riding. The mobile payments specialist has now more than doubled in back-to-back years, rising 154% last year and up a scintillating 186% so far this year. Unless the stock takes a 30% hit through the final three months of 2018, it will be one of the few stocks to have at least doubled for two consecutive years.

Stretching the streak to three years if it manages to double again in 2019 would put it in rarefied air. It has happened before. Vipshop Holdings more than doubled in 2012, 2013, and 2014. It didn't end well for the Chinese online discounter of brand-name apparel. Vipshop stock has gone on to shed more than two-thirds of its value since the end of its three-year winning streak. 

It doesn't have to end as badly for Square as it did for Vipshop, and to be fair, we're not even there yet. Vipshop needs to hold on to most of its gains this year before repeating the feat in 2019. Square has momentum and improving fundamentals, but going for the three-peat by doubling again next year won't be easy.

A Square transaction taking place in a bicycle shop.

Image source: Square.

Square dancing

The catalyst triggering last week's push to new all-time highs was Nomura Instinet analyst Dan Dolev boosting his price target on Square to $125. Dolev feels that improving gross payment volume (GPV) from larger merchants, strong Cash App downloads, and effective marketing initiatives justify a rosier outlook.

Dolev's new price goal is the highest on Wall Street. Square will naturally have to go a lot higher than $125 to double again next year, but anyone watching the growth stock darling explode over the past two years knows that it's simply just a matter of time. Every few months we see Square come through with a blowout report or announce a bar-raising development, leading analysts to scramble and jack up their price targets.

Valuation will be Square's biggest obstacle to repeating as a doubler in 2019. Bears will argue that the stock has outrun its fundamentals over its two-year tear, and it's a fair knock. Square's stock has soared 626% since the end of 2016. Trailing revenue in that time has moved just 57% higher. A lack of profitability continues to be a concern on a reported basis, thought adjusted net income is positive and growing. It's not outlandish to suggest that the stock has come too far too soon. 

Dolev plays up Square's accelerating top-line growth in recent quarters, but even his forecast of 45% in compound annual growth rate over the next three years doesn't suggest another gain of at least 100% in the share price next year. Square's streak of accelerating revenue growth -- now at six quarters -- will quietly come to a close. It wouldn't be a shock if Square stock also takes a breather in 2019. 

Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Square. The Motley Fool has the following options: short January 2019 $80 calls on Square. The Motley Fool has a disclosure policy.