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ThredUp (NASDAQ:TDUP) spiked on Tuesday after analysts welcomed the company’s fourth-quarter earnings results.
The Oakland-based e-commerce company posted its best and final results for the quarter and forecasts the improvement will continue into 2023. Management better forecasts. than expected revenue for the full year while charting a potential path to profitability in the second half of the year.
“Even though they’re not out of the woods yet, we think they have visibility into Q1 (since we’re 10 weeks away), so an implied improvement in year-over-year growth compared to Q4 ( when normalizing for disruptive gains) is encouraging,” Wedbush analyst Tom Nikic wrote in a review of the results. “With easier comparisons ahead and macro pressures likely to ease, TDUP could see a strong reaction from the top trends and we remain encouraged.” motivated by their belief in the path to profit.”
He tells clients that “risk/reward is very tilted to the upside” with momentum that can be built on these results. Nikic has rated the stock Outperform and assigned a $3 price target, suggesting the stock will continue to rally even after Tuesday’s rally.
Analysts at Raymond James, Needham Securities and Wells Fargo all give the stock an equivalent Buy rating. Needham analyst Anna Andreeva has assigned the Street’s highest target at $5.
“We think it’s too early to call for stabilizing consumer demand, but TDUP is taking control of the controllable, with improved unit economics and better automation help increase profits,” she concluded.
That said, there is still some caution among many analysts. For example, Keybanc maintains an equivalent Hold, remaining conservative in its corporate performance.
“TDUP notes cautious optimism about a more predictable budget consumer, with fiscal 2023 guidance pointing to meaningful improvement in the second half of 2023,” said analyst Noah Zatkin of Keybanc admitted. “We are encouraged by management’s focus on positive free cash flow by achieving quarterly adjusted EBITDA breakeven in the second half of 2023 along with lower investment capital requirements. significant but still maintaining the industry proportion is waiting for signs of implementation of the next plan in the context of challenging macro environment.”
Shares of ThredUp (TDUP) tear 61.71% higher on Tuesday when trading volume tends to reach 3000% of the daily average. Short interest on ThredUp is just over 8%, according to Seeking Alpha data.
Read more about details of earnings results.
