Poshmark Declines 7% Despite Solid Q2 Results

Shares of Poshmark (POSH) slipped 7% in Tuesday’s extended trade despite its better-than-expected results for the second quarter of 2021. Poshmark is a social marketplace for new and secondhand style for women, men, kids, home, and more.

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The company reported a loss of $0.04 per share, which was narrower than the loss of $0.07 per share estimated by analysts. Last year, it had reported earnings of $0.61 per share.

Quarterly revenue increased 22% year-over-year to $81.8 million and surpassed the Street’s expectations of $80.3 million. Gross merchandise value grew 25% year-over-year to $449.6 million.

Active buyers reached 7 million in the second quarter of 2021, marking 16% year-over-year growth from the same quarter last year. Adjusted EBITDA margin stood at 7.4%. (See Poshmark stock charts on TipRanks)

The Founder and CEO of Poshmark, Manish Chandra, said, “Our dynamic, flexible, and social marketplace continues to benefit from fast-moving apparel trends. We are uniquely positioned to benefit from today’s seismic shift in fashion, the pent-up demand for purchases across a wider range of apparel and accessories, and increased consumer interest in sustainability.”

Poshmark expects to post revenues in the range of $81 million to $83 million in the third quarter. Also, adjusted EBITDA is anticipated to be between $1 million to $2 million.

Following the release, Stifel Nicolaus analyst Scott Devitt reiterated a Buy rating on the stock with a price target of $48 (upside potential of 45.5%).

Devitt said, “We continue to view Poshmark as the best-positioned player in the resale E-commerce landscape, with an asset-light and easily extendable business model supporting attractive long-term margins.”

The stock has a Moderate Buy consensus based on 5 Buys and 3 Holds. The average Poshmark price target of $54 implies 63.6% upside potential from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Negative stance on Poshmark with 8.3% of investors on TipRanks decreasing their exposure to POSH over the past 30 days.