Revolve Group (RVLV) AI Stock Analysis

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Revolve Group

(NYSE:RVLV)

66Neutral

Revolve Group's stock shows strength due to its solid financial performance and positive earnings call outcomes, including robust revenue growth and strategic advancements in AI technology. However, technical indicators reveal a bearish trend, and the high P/E ratio suggests potential overvaluation. Improvements in cash flow generation and addressing challenges in the luxury segment are key areas for future focus.

Positive Factors

AI and Personalization

AI investments are expected to continue driving growth, enhancing customer engagement and retention, and reducing return rates.

Physical Retail Expansion

Physical retail expansion is expected to boost market share and engagement by increasing brand visibility and customer acquisition.

Negative Factors

Sales and Earnings Expectations

Management continues to not give much by way of sales or full earnings expectations, compounding the issue.

Valuation Concerns

Shares of Revolve do not meaningfully embed the retail opportunity or additional outsized growth.

Revolve Group (RVLV) vs. S&P 500 (SPY)

Market Cap

$1.35B

Dividend YieldN/A

Average Volume (3M)1.56M

Price to Earnings (P/E)27.4

Beta (1Y)2.00

Revenue Growth5.73%

EPS Growth81.83%

CountryUS

Employees1,632

SectorConsumer Cyclical

Sector Strength57

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.69

Shares Outstanding40,298,700

10 Day Avg. Volume1,953,377

30 Day Avg. Volume1,559,612

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)N/A

Price to Sales (P/S)1.40

Price to Cash Flow (P/CF)100.70

P/FCF Ratio100.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$27.08

Price Target Upside41.19% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

Revolve Group Business Overview & Revenue Model

Company DescriptionRevolve Group (RVLV) is a leading online fashion retailer that primarily caters to millennial and Gen Z consumers. The company operates in the fashion and apparel sector, offering a wide range of products including clothing, footwear, accessories, and beauty products. Revolve is known for its curated selection of trendy and contemporary styles from both established and emerging brands, providing a platform for fashion-forward consumers seeking the latest trends.

How the Company Makes MoneyRevolve Group makes money primarily through the sale of fashion and lifestyle products via its e-commerce platform. The company generates revenue by purchasing products from brands and designers at wholesale prices and selling them at retail prices to consumers. Key revenue streams include direct sales from its website and mobile app, where it offers a wide array of clothing, shoes, and accessories. Revolve also engages in strategic marketing and influencer partnerships to drive traffic and increase sales. Additionally, the company leverages data-driven insights to optimize inventory and pricing strategies, enhancing its profitability. Significant partnerships with fashion brands and collaborations with influencers contribute to expanding its market reach and customer base.

Revolve Group Financial Statement Overview

Summary

Revolve Group exhibits a strong financial position with stable revenue growth, solid gross margins, and low leverage. However, there are opportunities for improvement in net profit margins and cash flow generation. The company's strong equity base and consistent revenue growth provide a solid foundation for future expansion, although enhancing cash flow efficiency will be crucial for sustaining long-term growth.

Income Statement

Positive

The company demonstrated solid revenue growth with a Revenue Growth Rate of 5.73% in 2024. Gross Profit Margin remained strong at 52.52%, although Net Profit Margin was relatively modest at 4.39%. The EBIT Margin improved to 4.55%, indicating better operational efficiency compared to previous years. Overall, profitability is stable but could benefit from further improvement in net margins.

Balance Sheet

Very Positive

The balance sheet is healthy, with a low Debt-to-Equity Ratio of 0.09, reflecting minimal leverage. The Return on Equity is reasonable at 11.32%, suggesting effective use of equity capital. The Equity Ratio is robust at 65.76%, indicating a strong equity base relative to total assets. The financial position appears stable with low reliance on debt.

Cash Flow

Positive

Operating Cash Flow to Net Income Ratio is 0.54, suggesting moderate efficiency in converting net income to cash. Free Cash Flow to Net Income Ratio stands at 0.42, indicating room for improvement in cash generation. Free Cash Flow growth was negative at -46.24%, reflecting potential challenges in cash flow generation, despite positive net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.13B	1.07B	1.10B	891.39M	580.65M
	Gross Profit
593.27M	554.20M	592.32M	489.82M	305.28M
	EBIT
51.42M	22.13M	73.14M	105.29M	61.07M
	EBITDA
51.42M	27.53M	77.93M	109.80M	65.89M
	Net Income Common Stockholders
49.56M	28.15M	58.70M	99.84M	56.79M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
256.60M	245.45M	234.72M	218.46M	146.01M
	Total Assets
665.55M	608.89M	579.32M	480.41M	305.75M
	Total Debt
40.73M	40.99M	24.50M	6.94M	0.00
	Net Debt
-215.87M	-204.46M	-210.22M	-211.51M	-146.01M
	Total Liabilities
227.76M	223.75M	199.75M	163.40M	105.69M
	Stockholders Equity
438.19M	385.14M	379.57M	317.01M	200.06M
Cash Flow		Free Cash Flow
21.04M	39.14M	18.27M	60.12M	71.45M
	Operating Cash Flow
26.69M	43.34M	23.44M	62.31M	73.77M
	Investing Cash Flow
-9.11M	-4.20M	-5.17M	-2.19M	-2.32M
	Financing Cash Flow
-5.36M	-30.38M	887.00K	12.77M	8.66M

Revolve Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price19.18

Price Trends

50DMA

23.93

Negative

100DMA

28.61

Negative

200DMA

26.23

Negative

Market Momentum

MACD

-1.25

Negative

RSI

39.08

Neutral

STOCH

27.87

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RVLV, the sentiment is Negative. The current price of 19.18 is below the 20-day moving average (MA) of 20.70, below the 50-day MA of 23.93, and below the 200-day MA of 26.23, indicating a bearish trend. The MACD of -1.25 indicates Negative momentum. The RSI at 39.08 is Neutral, neither overbought nor oversold. The STOCH value of 27.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RVLV.

Revolve Group Risk Analysis

Revolve Group disclosed 65 risk factors in its most recent earnings report. Revolve Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Revolve Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MNSO	75 Outperform	$4.90B	13.48	26.89%	4.11%	10.01%	4.13%
VIPS	68 Neutral	$6.55B	6.41	20.12%	3.34%	-5.47%	-2.19%
RVLV	66 Neutral	$1.35B	27.39	12.04%	―	5.73%	81.83%
ASO	66 Neutral	$2.46B	6.42	21.14%	1.25%	-3.67%	-14.66%
ETSY	60 Neutral	$4.77B	18.78	-39.97%	―	2.18%	5.77%
Sector *	60 Neutral	$6.56B	11.42	3.23%	4.27%	2.37%	-21.19%
W	35 Underperform	$3.28B	―	17.86%	―	-1.27%	38.07%

* Consumer Cyclical Sector Average

Performance Comparison

RVLV

Revolve Group

19.18

-0.41

-2.09%

VIPS

Vipshop

12.78

-2.46

-16.14%

Wayfair

27.44

-30.31

-52.48%

ETSY

Etsy

45.93

-22.42

-32.80%

ASO

Academy Sports and Outdoors

36.88

-21.90

-37.26%

MNSO

MINISO Group Holding

16.64

-5.03

-23.21%

Revolve Group Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: -32.27% | Next Earnings Date: May 6, 2025

Earnings Call Sentiment Positive

Revolve's earnings call was largely positive, highlighting strong fourth-quarter and full-year performances, significant growth in net income and adjusted EBITDA, and improvements in marketing and logistics efficiencies. The company also emphasized international growth and advancements in AI technology. However, challenges remain in the luxury segment, and January sales were impacted by wildfires affecting California.

Highlights

Strong Fourth Quarter Performance

Net sales were $294 million, an increase of 14% year-over-year. Net income for the fourth quarter was $12 million, more than triple the $3 million in the prior year quarter. Adjusted EBITDA was $18 million, an increase of 114% year-over-year.

Full Year 2024 Achievements

Net income and adjusted EBITDA increased 73% and 60% year-over-year respectively. Net sales growth improved measurably each quarter throughout 2024.

Improvements in Marketing and Logistics

The company achieved a nearly 130-basis point reduction in marketing spend as a percentage of net sales and a 130 basis point reduction in global logistics costs as a percentage of net sales.

International Growth

International net sales increased 14% year-over-year, with record net promoter scores in international markets.

AI and Technology Advancements

Significant advancements in AI technology and personalization capabilities, including AI-powered search algorithms and AI-driven product recommendations.

Lowlights

Challenges in Luxury Segment

FWRD segment experienced volatility, with lower average order value due to product mix.

January 2025 Sales Impacted by Wildfires

Los Angeles wildfires temporarily impacted demand in California, contributing to softer net sales growth in January.

Company Guidance

In the recent conference call, Revolve provided a comprehensive overview of their financial performance and guidance for 2025. The company reported a notable 14% year-over-year increase in Q4 net sales, reaching $294 million, with the REVOLVE and FWRD segments growing by 15% and 11%, respectively. International sales surged by 29%, highlighting strong global demand. Gross margin improved by 50 basis points, while net income reached $12 million, more than tripling from the previous year. Adjusted EBITDA also soared by 114%, demonstrating operational efficiency and cost management. The company plans to maintain marketing expenses at around 14.9%-15.1% of net sales for 2025, aiming for further efficiency gains across performance and brand marketing channels. Revolve also emphasized strategic priorities for 2025, including brand expansion, AI technology deployment, and physical retail exploration, with a strong focus on leveraging their proprietary technology stack to drive growth and efficiency. They aim for a gross margin between 52.4% and 52.9% in 2025, with continued investments in key growth areas while cautiously navigating factors like tariffs that could impact margins.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.