Online apparel retailer Revolve Group Inc. (RVLV) has grown by more than 63 percent since the beginning of the year. This occurred during the company’s adverse year, specialized in selling clothes for holidays and celebrations. As social interaction was reduced because of the COVID-19 pandemic, demand for goods from the Revolve Group was comparatively poor.
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News of the eventual arrival of a successful coronavirus vaccine has been a growth engine for many businesses whose industry is related to the return of social interaction. No exception is Revolve Group. Investors agree that the retailer’s goods have high pent-up demand. As soon as festivals, concerts and other events resume, there will be immediate increase in demand in suitable clothes.
Thus, analysts from Piper Sandler initiated the rating of “Overweight” for Revolve Group shares and set a target price of $ 30, while BTIG Research analysts also started tracking the stock with initial rating of “Buy” assigning even higher price target of $41. Experts think that in 2021, as soon as family, corporate and mass activities resume, the business will be able to return to success.
The income of the Revolve Group increased quickly before the pandemic, but was negative after a time of social restrictions. Sales fell by 2 percent year-on-year in the last reporting quarter. In the third quarter, the number of orders was 4 percent lower year-on-year. Such a low reduction is a good indicator, however, considering the sharp decrease in the target users for Revolve Group goods. Around the same time, Revolve Group’s income improved due to cost control and good inventory management.
Overall, analysts from the Piper Group believe that, as an online retailer focusing on young people, Revolve Group is expected to get a boost after the pandemic.
Revolve Group Inc. (RVLV) was down -1.25% in last session to conclude trading at $30.1.