Shares Of ThredUp Are On A Tear After Earnings Beat: What Do 4 Analysts Think?

Shares of ThredUp Inc TDUP saw volatility into Tuesday’s trading session, climbing as much as 58% before the company issued earnings and guidance that exceeded consensus estimates. The stock corrected itself, but is on an upward trajectory, for now.

By The Numbers: ThredUp issued a quarterly loss per share of 19 cents, which beat the consensus loss estimates of 20 cents on revenues of $71.32 million, which beat the $63.03 consensus, according to Benzinga Pro.

The company said it saw first-quarter revenue to be between $71 million and $73 million, ahead of the $69.62 million estimates, and full-year 2023 revenue coming in at between $310 million and $320 million, ahead of the $301.73 million consensus estimates.

What do the analysts think?

The KeyBanc Analyst: Noah Zatzkin reiterated a Sector Weight rating and withdrew the price target on the stock.

Zatzkin said that while the secondhand clothing retailer issued better-than-expected results, KeyBanc was concerned the looming economic downturn could continue to negatively impact ThredUp's core consumer group, and the company might face challenges achieving benefits of its Remix acquisition.

Additionally, Zatzkin said the competitive set is highly fragmented, and ThredUp must remain aware of what buyers are looking for given the cost of processing items that may never sell.

Check out more analyst ratings here. 

The Telsey Advisory Analyst: Dana Telsey maintained an Outperform rating and left the $3 price target unchanged.

Telsey was relatively bullish on ThredUp, saying the company’s better-than-expected revenue was driven by product revenue growth of 20.4% and strong supply and demand discipline. The firm has an optimistic view about company shares in terms of forward guidance, saying that ThredUp is well-positioned in the resale market despite ongoing macro and inflationary pressures.

The Needham Analyst: Anna Andreeva set a Buy rating on the stock, with a $5 price target.

Andreeva said its rating came as ThredUp’s sales outlook for 2023 was surprisingly better than consensus and peers, driven by company-specific initiatives such as data-driven pricing and promo strategies, as well as better economics from incremental fees for clean-out bags and monetizing returns.

The analyst said ThredUp expected to return to its historical marketing spend cadence while "controlling the controllables, with unit economics improving and better automation driving profitability gains," despite an uncertain retail environment.

The Raymond James Analyst: Rick Patel maintained an Outperform rating, with a $4 price target.

Patel noted the Outperform rating came as ThredUp’s active buyers and orders decreased by 2% and 8%, respectively, in the fourth quarter, but revenue still beat the consensus. The $4 price target could be owed to ThredUp’s management saying it did not expect to draw down on more debt or access the capital markets, nor expect the cash to fall below $50 million as it funds the business.

TDUP Price action: Shares of ThredUp gained 62.89% to $2.66, according to data from Benzinga Pro.

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Photo: Courtesy ThredUp