Anna Andreeva, an analyst from Needham, maintained the Buy rating on Revolve Group (RVLV – Research Report). The associated price target is $23.00.
Anna Andreeva’s rating is based on a confluence of positive indicators for Revolve Group’s business performance and market position. She notes that the Revolve Group has experienced its first positive sales quarter within a year for its REVOLVE brand, doing so with improved margins. This uptick in sales, particularly during the holiday season, suggests a strengthening demand for their products. Andreeva also points to an increase in full-price sales as a sign of robust consumer interest and a decrease in markdown sales, which indicates a strategic shift away from promotions that could enhance profitability. Additionally, the company is observing an improvement in return rates, a factor that could further improve margins if the trend continues.
The recommendation for a Buy rating also considers the company’s financial outlook and stock valuation. Andreeva believes that Revolve Group’s stock is poised for a multiple expansion due to anticipated growth in both top-line revenue and profit margins. Despite trading at over 20 times projected EV/EBITDA for 2024, she argues that the stock deserves a higher valuation given these positive inflection points. The expectation of an easier comparison in March and guidance for stable margins in the upcoming year further support the optimism around the company’s financial trajectory. These factors combined form the basis for Andreeva’s Buy rating for the Revolve Group’s stock.
In another report released today, Raymond James also upgraded the stock to a Buy with a $21.00 price target.
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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 Announces Fourth Quarter and Full Year 2023 Financial Results
- RVLV Upcoming Earnings Report: What to Expect?
- Revolve Group price target raised to $20 from $18 at Stifel
- Revolve Group Welcomes Jennifer Baxter Moser to Board
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