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thredUP (TDUP)
NASDAQ:TDUP
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thredUP
(NASDAQ:TDUP)
64Neutral
Positive Factors
Financial Performance
Preliminary fourth-quarter results exceeded both prior guidance and the Street’s profitability expectations on a U.S. standalone basis.
Market Strategy
The sale of the European business has removed a distraction for management and freed up working capital for marketing investment.
Revenue Growth
US revenue grew approximately 9% in 4Q, relative to the prior outlook of -4% at the midpoint and -10% in 3Q.
Negative Factors
Demand Risk
The largest risk is any weaker demand environment that could put further downward pressure on revenue.
Liquidity Concerns
Liquidity remains an issue regarding larger investors potentially helping support volatility.
thredUP (TDUP) vs. S&P 500 (SPY)
Market Cap
$300.94M
Dividend YieldN/A
Average Volume (3M)677.87K
Price to Earnings (P/E)―
Beta (1Y)4.24
Revenue Growth-6.95%
EPS Growth-0.73%
CountryUS
Employees1,630
SectorConsumer Cyclical
Sector Strength51
IndustrySpecialty Retail
Share Statistics
EPS (TTM)-0.69
Shares Outstanding92,620,060
10 Day Avg. Volume613,586
30 Day Avg. Volume677,866
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.14
Price to Cash Flow (P/CF)14.50
P/FCF Ratio14.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside15.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
thredUP Business Overview & Revenue Model
Company DescriptionthredUP Inc. (TDUP) is a leading online resale platform for secondhand clothing, shoes, and accessories. Operating within the e-commerce and fashion sectors, thredUP provides a convenient platform for consumers to buy and sell high-quality secondhand apparel. The company aims to promote sustainable fashion by extending the lifespan of clothing items and reducing waste.
How the Company Makes MoneythredUP makes money primarily through the resale of secondhand clothing. The company operates a consignment model where individuals send their used clothing to thredUP, which then evaluates, prices, and lists the items on its online platform. Upon sale, thredUP takes a commission, and the remainder is paid to the original seller. Additionally, the company generates revenue through its 'Resale-as-a-Service' (RaaS) program, partnering with retailers and brands to offer resale solutions. This program helps other companies integrate resale into their business models, thereby expanding thredUP's reach and revenue opportunities. Key revenue streams include sales from its online marketplace and service fees from its RaaS partnerships.
thredUP Financial Statement Overview
Summary
thredUP's financial statements reflect a company on the path to recovery, with notable improvements in profit margins and cash flow efficiency. However, challenges remain, particularly in maintaining revenue growth and strengthening the balance sheet. Continued focus on operational efficiency and strategic revenue growth will be crucial.Income Statement
thredUP has shown a commendable improvement in its gross profit margin over the years, reflecting efficient cost management. The company has succeeded in narrowing its net loss, with significant reductions in negative EBIT and EBITDA margins, indicating progress towards profitability. However, revenue growth has been inconsistent, with a notable decline in the most recent year, which may pose challenges in sustaining financial recovery.65
Positive
Balance Sheet
The balance sheet reveals a decreasing debt-to-equity ratio, suggesting an improvement in leverage management, but the overall financial structure remains fragile due to negative equity in earlier years. While the company has improved its equity position recently, the overall equity ratio indicates a relatively low buffer against liabilities, highlighting potential risks if profitability does not improve.58
Neutral
Cash Flow
The cash flow statement shows a positive trajectory in operating cash flow, moving from negative in previous years to positive recently, suggesting improved operational efficiency. However, free cash flow remains negative, albeit improved, reflecting continuing capital expenditure and challenges in achieving sustainable cash profitability. The improvement in cash flow relative to net income is a positive indicator of operational resilience.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 260.03M | 322.02M | 288.38M | 251.79M | 186.01M | Gross Profit |
| 207.13M | 213.81M | 192.34M | 178.13M | 128.15M | EBIT |
| -40.00M | -71.84M | -89.49M | -62.39M | -46.59M | EBITDA |
| -20.12M | -53.10M | -70.94M | -47.68M | -36.90M | Net Income Common Stockholders |
| -76.99M | -71.25M | -92.28M | -63.18M | -47.88M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 44.18M | 64.18M | 104.93M | 205.83M | 64.48M | Total Assets |
| 171.22M | 249.97M | 301.95M | 360.83M | 142.91M | Total Debt |
| 40.69M | 76.41M | 84.81M | 76.25M | 59.68M | Net Debt |
| 8.84M | 20.33M | 46.78M | -8.29M | -4.81M | Total Liabilities |
| 114.92M | 146.05M | 161.95M | 155.09M | 117.24M | Stockholders Equity |
| 56.30M | 103.92M | 140.00M | 205.73M | 25.67M |
| Cash Flow | Free Cash Flow | |||
| -1.68M | -38.58M | -95.36M | -54.85M | -38.53M | Operating Cash Flow |
| 4.90M | -22.59M | -52.10M | -35.02M | -19.11M | Investing Cash Flow |
| -10.26M | 43.68M | 8.92M | -169.58M | -19.42M | Financing Cash Flow |
| -4.39M | -3.60M | -3.94M | 228.96M | 18.21M |
thredUP Technical Analysis
Neutral
2.59
Price Trends
2.44
Negative
1.92
Positive
1.54
Positive
Market Momentum
0.06
Negative
47.82
Neutral
58.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TDUP, the sentiment is Neutral. The current price of 2.59 is above the 20-day moving average (MA) of 2.45, above the 50-day MA of 2.44, and above the 200-day MA of 1.54, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 47.82 is Neutral, neither overbought nor oversold. The STOCH value of 58.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TDUP.
thredUP Risk Analysis
thredUP disclosed 64 risk factors in its most recent earnings report. thredUP 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
thredUP Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $13.31B | 35.77 | 101.78% | ― | 6.40% | 891.13% | |
67 Neutral | $1.59B | 31.08 | 12.04% | ― | 5.73% | 81.83% | |
64 Neutral | $300.94M | ― | -79.06% | ― | -6.95% | -0.73% | |
63 Neutral | $5.00B | 19.69 | -39.97% | ― | 2.18% | 5.77% | |
59 Neutral | $12.24B | 11.04 | -1.00% | 3.78% | 1.30% | -19.54% | |
49 Neutral | $625.21M | ― | 32.94% | ― | 9.32% | 25.94% | |
46 Neutral | $4.30B | ― | 17.86% | ― | -1.27% | 38.07% |
* Consumer Cyclical Sector Average
Performance Comparison
TDUP
thredUP
2.41
0.39
19.31%
W
Wayfair
32.03
-33.82
-51.36%
ETSY
Etsy
47.18
-18.72
-28.41%
RVLV
Revolve Group
21.49
0.38
1.80%
CHWY
Chewy
32.51
16.42
102.05%
REAL
RealReal
5.39
1.50
38.56%
thredUP Earnings Call Summary
Earnings Call Date: Mar 3, 2025 | % Change Since: 16.14% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting strong growth in customer acquisition and technological advancements that are improving conversion rates and financial performance. However, there are concerns regarding a decline in active buyers and potential challenges from tariffs and economic conditions.Highlights
Strong Customer Acquisition and Retention
Customer acquisition remained very strong in Q4, with new customer volume up 32% year over year. Q1 is shaping up to be one of the strongest acquisition quarters in ThredUp's history.
AI and Technology Investments
ThredUp's AI search functionality has led to an 85% higher conversion rate for sessions with image searches. High-performing AI-generated pivots have click-through rates above 15%, and 360-degree photos have increased 30-day sell-through rates by up to 12%.
Financial Performance and Growth
For Q4, revenue totaled $67.3 million, an increase of 9.5% year over year. Gross margin was 80.4%, a 290 basis point increase over the same quarter last year. Adjusted EBITDA was $5 million or 7.4% of revenue.
Positive Outlook for 2025
ThredUp expects to reach positive free cash flow on an annual basis in 2025 and plans for revenue growth of 6% at the midpoint for the full year.
Lowlights
Decline in Active Buyers
Active buyers reached 1.3 million, a decline of 6% year over year.
Potential Challenges from Tariffs and Economic Conditions
Concerns about tariffs and inflation affecting consumer psychology and spending. 51% of consumers say higher prices due to inflation impact how much they spend on apparel.
Company Guidance
In the ThredUp Inc. fourth quarter 2024 earnings call, substantial progress was reported in reaccelerating growth while maintaining free cash flow and adjusted EBITDA targets. Key metrics included a 32% year-over-year increase in new customer volume in Q4, with Q1 shaping up to be one of the strongest acquisition quarters in the company's history. Fresh listings increased by 9% year-over-year, indicating strong buyer growth and retention. The company also highlighted the impact of investments in AI, with image searches showing an 85% higher conversion rate, and AI-generated lifestyle imagery increasing 30-day sell-through rates by up to 12%. For Q4 2024, revenue reached $67.3 million, a 9.5% increase year-over-year, with a gross margin of 80.4%, a 290 basis point increase from the previous year. The positive momentum in customer acquisition and AI-driven improvements positions ThredUp Inc. to achieve its revenue and profitability goals for 2025, anticipating revenue growth between $270 million and $280 million, representing a 6% increase year-over-year.thredUP Corporate Events
M&A TransactionsBusiness Operations and Strategy
thredUP Divests European Business to Focus on U.S. Market
Neutral
Dec 3, 2024
ThredUp Inc. has divested 91% of its European business, Remix, to General Manager Florin Filote for €1, while retaining a minority stake. This strategic move allows ThredUp to concentrate on its core U.S. market, while Remix operates independently to expand in Europe. The transaction includes a convertible promissory note from Remix to ThredUp, reflecting prior investments. The divestiture is expected to benefit both parties by aligning them with their respective market strengths.
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.