Analyst Ike Boruchow from Wells Fargo maintained a Buy rating on thredUP (TDUP – Research Report) and keeping the price target at $5.00.
Ike Boruchow has given his Buy rating due to a combination of factors surrounding thredUP’s recent corporate initiatives and financial performance. The company has taken significant steps to transform into an AI-powered retail entity, which is expected to enhance its technological capabilities and improve margins. thredUP has demonstrated a commitment to scaling its operations and achieving profitability, as evidenced by its shift to leverage AI technology, resulting in an upward revision of its margin outlook and a positive free cash flow forecast ahead of schedule. Despite facing top-line headwinds, the company’s strategic focus on efficiency and cost reduction has positioned it to meet short-term earnings targets while maintaining a growth trajectory.
Moreover, Boruchow’s optimism is bolstered by thredUP’s management’s expectation of positive EBITDA in the upcoming quarter, along with an anticipated full-year positive free cash flow, achieved a year earlier than initially planned. Although revenue growth forecasts have been modestly tempered due to a challenging consumer spending environment and measured advertising outlays, the company’s focus on improving gross margins and EBITDA margins signals a strategic trade-off favoring profitability over rapid top-line expansion. thredUP’s investment in AI technology is seen as a game-changing move that could drive higher conversion rates and more effective merchandising, which in turn could help bridge the gap between new and used merchandise sales while maximizing the potential of their extensive inventory.
Boruchow covers the Consumer Cyclical sector, focusing on stocks such as Nike, Tapestry, and Gap. According to TipRanks, Boruchow has an average return of -3.7% and a 43.50% success rate on recommended stocks.
In another report released on May 1, Telsey Advisory also maintained a Buy rating on the stock with a $4.00 price target.
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thredUP (TDUP) Company Description:
ThredUp Inc is an online resale platform for women and kids apparel, shoes, and accessories. It generates revenue from items that are sold to buyers through the website, mobile app, and RaaS partners.
