The average target price of RVLV is 20 and suggests 1% upside potential. Usually, this means a HOLD recommendation among investment firms. This neutral recommendation suggests no significant price movement, up or down, in the next 12 months. The most optimistic analyst has a target price of 30.0. This translates into 47% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 17.0. This is equivalent to 17% downside potential in the worst case. 

Revolve Group, Inc. operates as an online fashion retailer for consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers women's apparel, footwear, accessories, and beauty styles under established and emerging brands, as well as owned brands. It also provides various luxury brands. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.

Revolve Group, Inc.

Consumer Cyclical

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

RVLV reported revenue of USD 1 156mn in the last 12 months, up 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 3% from FY24 to USD 0.72. Market expects EPS to reach USD 0.63 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 34ppts and its growth decelerated by 10ppts in the past month. There is a distinction between the stock's performance and that of its peers from the same country and industry. Over six months its performance trailed that of this peer group by 28ppts and its growth decelerated by 11ppts in the previous month. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 5.2% in the last 12 months, up from 2.5% in FY23. 

Historically, RVLV has reported modest net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 4.4%, a growth from 2.6% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 10.9%, above the peers. The consensus estimate for FY24 for RoCE is 8.4%, however, this time below its peers. 

Another important profitability metric, return on assets (RoA), amounted to 7.5% in the last 12 months, an increase from 4.7% in FY23. The market analysts predict that RoA will be 7.4% in FY24, again stronger than its peers. 

Revolve Group, Inc. reported a return on equity (RoE) of 12.0% in the last 12 months, up from 7.4% in FY23. The market consensus projects an RoE of 12.1% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.2 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

RVLV boasts very high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is usually very stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. 

No other major risks have been identified.

The risk of default is moderate. We note low margin volatility, strong debt servicing capacity, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors and we point to bleak profitability, poor working capital management.

In highly turbulent market conditions, RVLV is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, RVLV is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, neutral on EV/EBITDA, reasonably priced on P/FCF. 

Revolve Group, Inc.

$ 20.2

2

Revolve Group, Inc.

$ 20.2

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 20.2

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