Alexandra Steiger, an analyst from Goldman Sachs, has initiated a new Sell rating on Revolve Group (RVLV).
Alexandra Steiger’s Sell rating on Revolve Group is based on a convergence of factors impacting the broader high-end online apparel sector, which are expected to continue pressing on the company’s performance. She notes the current industry headwinds are likely to persist, potentially leading to more negative revisions in the company’s financial estimates, as has been occurring throughout the previous year. Steiger sees these ongoing challenges as key detriments to Revolve’s near-term risk/reward profile, despite recognizing the company’s potential in the longer term due to its focus on the Millennial and Gen Z demographics.
Additionally, Steiger’s analysis includes skepticism about Revolve’s ability to reaccelerate its net sales growth to over 10% in the long term and doubts regarding an improvement in Adjusted EBITDA margins to exceed 10%. These concerns are factored into her 12-month price target of $12, which is derived from a valuation approach blending forward EBITDA and free cash flow estimates, adjusted for share-based compensation, and applying industry-standard multiples. The combined evaluation metrics and the discounting for projected future cash flows underscore the cautious stance taken in this Sell recommendation.
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Revolve Group (RVLV) Company Description:
Revolve Group, Inc. engages in the retail of next-generation fashion for millenial consumers. It operates through the following segments: Revolve and Forward. The Revolve segment offers assortment of apparel and footwear, accessories and beauty products from emerging, established and owned brands. The Forward segment provides luxury products. The company was founded by Michael Mente and Mike Karanikolas in 2003 and is headquartered in Cerritos, CA.
Read More on RVLV:
- Revolve Group downgraded to Neutral from Outperform at Baird
- Revolve Group downgraded to Hold from Buy at Jefferies
- Revolve Group price target raised to $21 from $16 at Roth MKM
- The sports and lifestyle brand stocks to own in 2024, according to Stifel
- Revolve Group price target raised by $4 at BTIG, here’s why
