Brilliant Earth Group: Balancing Positive Q4 Performance with Challenges in Sustained Growth

Analyst Oliver Chen of TD Cowen maintained a Hold rating on Brilliant Earth Group (BRLT – Research Report), with a price target of $2.00.

Oliver Chen’s rating is based on a combination of factors that reflect both positive developments and ongoing challenges for Brilliant Earth Group. The company reported a better-than-expected fourth quarter with a notable increase in orders and strong gross margins, which contributed to a positive stock reaction. However, despite these improvements, the average order value declined, and the company’s guidance for fiscal year 2025 suggests modest growth in net sales and adjusted EBITDA margins.
While the engagement ring segment showed promising momentum, particularly through the showroom channel, there are concerns about the sustainability of this trend. The company’s asset-light model and proprietary designs are strengths, yet the decline in average sale prices and increased employee costs present risks. As a result, Oliver Chen maintains a Hold rating, with a price target of $2, as he awaits more consistent and sustained growth before considering a more favorable recommendation.