|Bid||34.16 x 1300|
|Ask||34.25 x 900|
|Day's Range||33.97 - 34.90|
|52 Week Range||25.11 - 48.36|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||78.12|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||42.38|
(Bloomberg Opinion) -- A $69.90 polka dot dress from Zara has become the fashion hit of the summer. Despite little email or social media promotion from the chain, the flowy, universally flattering mid-length frock has become so ubiquitous that someone has created an Instagram account to collect sightings of it out in the fashion wilds – including several that appear to show multiple women wearing it to the same event.The frenzy around the garment epitomizes the ability of the brand’s parent, Inditex SA, to ride a sartorial wave.But the company, founded by Spain’s richest man, Amancio Ortega, is coming under intensified pressure. Rivals in the U.S. and Europe are catching up to its short production lead times. Meanwhile, cheaper upstarts such as Associated British Foods Plc’s Primark and Boohoo Group Plc, are burnishing their fashion credentials.There is no doubt that Inditex’s business model has served it handsomely for more than four decades. But its approach must prove its mettle now more than ever. Otherwise, its advantages risk being gradually whittled away, along with the group’s industry-leading profitability.The retailer, of course, is famous for its fast supply chain. Many competitors order from factories at least six months in advance. But Inditex’s brands, led by Zara, which accounts for about 70% of group sales, produce most of their garments within the current fashion season. About 57% of products are made close to its headquarters in Arteixo, northern Spain, including at facilities in Portugal, Morocco and Turkey. This means Zara clothes can go from design to shop floor within a matter of weeks.Just as important as the tempo is its unique process of developing ideas.It starts with Zara’s army of store managers, who communicate what’s selling and what trends are emerging to the commercial team within Inditex’s sprawling head office. This is not some complex exercise in big data; it’s a conversational approach to absorbing what shoppers want. Designers, who sit nearby, incorporate that feedback into their creations.This has all added up to spectacular growth. But, not only is the company maturing, the competitive landscape has become more difficult. Progress from here will be much harder work.Social media makes it easier for all retailers to see what is hot. Just take those polka dots: Even Topshop, now widely regarded as a bit of a fashion has-been, also managed to produce a stand-out spotty dress. At the same time, retailers from Britain’s Next Plc to Gap Inc. in the U.S. are finally shortening their supply chains. They are still not as speedy as Inditex, but they are narrowing the gap.Another risk is the rise of online shopping. Most stores find that the high cost of fulfilling these sales squeezes profitability. But Inditex’s process is not all that different from what it’s already doing, and that helps shield its margins from the digital onslaught. Store managers telling the head office that they need three puff-sleeve blouses and two pairs of chunky sandals is similar to an individual placing the same order from her laptop. Indeed, Inditex is fond of pointing out that it was a digital company long before the rise of e-commerce.Despite all of its advantages, Inditex’s operating margin has been shrinking for the past six years. Consequently, the group is opening fewer, larger stores, and plans to increase space in prime locations by 5-6% this year. This is the right strategy, but it means that it won't be able to count on large-scale store openings to boost revenue growth. The company is also overhauling its management. Pablo Isla, executive chairman since 2011, will cede his chief executive officer role to Carlos Crespo. By elevating the chief operating officer to the top job, Inditex is clearly trying to wring the maximum benefit from the business model, in order to continue to stay ahead of rivals.At its heart is fashion. We’re at a moment in apparel retailing in which technology is often framed as the lynchpin of any success or turnaround. Investors have been dazzled by newcomers StitchFix Inc. and Revolve Group Inc., which tout their ability to use algorithms to create and buy the right product selection. Executives from the likes of Gap and American Eagle Outfitters Inc. emphasize more personalized digital experiences as a way to win over customers.And while Zara counts on technology, such as by using radio frequency identification to know exactly where every organza halter-neck top and utility boiler suit is, much of its dominance is actually due to something more old-school: it knows how to make clothes that people want – even before they do.Though cost control is always important, what will be crucial for Crespo is ensuring that Zara’s fashion compass stays perfectly calibrated. Putting style at the center of everything the company does is essential, not only to ensure that Zara can continue to charge a premium for the latest looks, but also for ensuring it doesn't emulate rival Hennes & Mauritz AB and end up with a pile of unsold stock.As sales growth has slowed in recent years there have been questions as to whether Inditex has retained its fashion flair, particularly with fewer discernible trends to chase.That polka-dot dress shows that it is still capable of churning out the blockbusters. To stay ahead of increasingly nimble rivals, it must produce a steady stream of equally Instagram-friendly fashion hits.To contact the authors of this story: Andrea Felsted at email@example.comSarah Halzack at firstname.lastname@example.orgTo contact the editor responsible for this story: Jennifer Ryan at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Online retailer Revolve Group Inc. says it offers about 1,000 new fashion items a week for sale. A glance at its website shows 233 new arrivals just dropped.That rapid turnover and its use of social media have made Revolve one of the best performing initial public offerings this year and created a $1.5 billion fortune for founders and co-Chief Executive Officers Michael Karanikolas and Michael Mente.Revolve markets its changing lineup of trendy fashions through a network of 3,500 so-called influencers -- including Kendall Jenner -- and more than 3.2 million Instagram followers. Mente, 38, handles marketing and fashion lines, while Karanikolas, 41, oversees technology and logistics.Shares of Cerritos, California-based Revolve have more than doubled since their June 6 IPO and were up 4.2% to $38.59 at 12:10 p.m. in New York, giving the firm a market value of about $2.7 billion. Only Beyond Meat Inc. and Cortexyme Inc. had better U.S. debuts this year.Karanikolas and Mente own a combined 56% stake in the millennial-focused e-commerce company and control more than two-thirds of the firm’s voting shares through a separate entity called MMMK Development. Mente owns an additional 1.4% stake outside of MMMK, according to a regulatory filing.Revolve’s offering follows a September listing by luxury-clothing platform Farfetch Ltd., which raised $855 million in its IPO. Three other e-commerce companies have gone public in the U.S. this year, pulling in a combined $471 million, according to data compiled by Bloomberg.Before starting Revolve in 2003, Karanikolas and Mente both worked at NextStrat, a now-defunct California-based software firm. The pair saw an opportunity in online fashion sales, then spent the first few years persuading clothing companies to let them sell their products on Revolve. They have since added their own lines, with about 79% of sales at full price, according to the filing.Net income increased almost fivefold last year to $30.7 million on sales of $499 million, according to the filing.Numerous Wall Street analysts offered buy ratings for Revolve last week, citing its financial performance, influencer marketing strategy and international expansion.“The future includes a lot of what we have right now,” Mente said in an interview last month. “Everything we’re doing right now is working very well.”Read more: Retailer Revolve Gets 2019’s Third-Best U.S. Trading DebutTo contact the reporter on this story: Jasmine Teng in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Pierre Paulden at email@example.com, Steven Crabill, Peter EichenbaumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
IPO stocks have been running hot in 2019 and are targets for investors seeking to outperform the market. Uber stock, Chewy stock and Beyond Meat stock are near buys.
Revolve shares rose nearly 10% after the e-commerce retailer was initiated with two research analyst groups at outperform.
Revolve Group, a profitable online fashion retailer, is IBD Stock Of The Day. Revolve, which went public in June, is setting up in an IPO base.
Bank of America Merrill Lynch has initiated coverage on the newly public Revolve Group LLC (NYSE: RVLV ) The Analyst Justin Post initiated coverage of Revolve with a Neutral rating and $36 price target. ...
After the chaos of the Russell Index rebalancing and the drama of the G-20 meeting, the market is set to take a rest as we head into the Independence Day holiday. RVLV is seen as a leading edge fashion play and should remain in play for that until its earnings reports eventually hit. There are a few biotechnology names on my radar and there is some bounce in gold miners, but this is definitely a very dull market.
Stocks got off to a weak start Tueday, after Monday's strong gains. The Dow Jones index was less than 1% from a new high.
(Bloomberg) -- The end of Revolve Group Inc.’s quiet period was met with a chorus of buy ratings from Wall Street, with only one analyst straying from the pack. And even he praised the fashion e-tailer, but cited worries over valuation for his hold-equivalent rating.The analysts widely cited Revolve’s financial performance, influencer marketing strategy and opportunities to expand internationally as key differentiators and growth drivers. "Revolve is the future of retail and brand marketing with its digital commerce platform built on a data-driven backbone and an enviable influencer ecosystem," Jefferies analyst Randal Konik wrote.In all, Bloomberg data showed nine analysts coming forward with ratings on Revolve, with eight buys and one hold. The stock climbed as much as 7.3% Tuesday to $35.19 per share, nearly 96% above its initial public offering price of $18.Here’s a round-up of what analysts are saying about Revolve.Jefferies, Randal Konik“We see Revolve’s growth and market share gains in the first inning.”Stock has upside to $60 or higher, based on: low market share with large total addressable market; strong margins that are likely to head higher; platform flywheel that drives new and existing customer site traffic; proprietary systems drive efficiency.“Proprietary systems and algos help curate assortments, effectively target new and existing customers, and predict trends."Rates buy, has a Street-high price target of $60Cowen, Oliver Chen“Revolve is well-positioned to grow its active user base as it captures fashion-focused Millennial and Gen-Z shoppers through its on-trend assortment, its influencer-based marketing model, and its emphasis on experiential events to promote the brand.”“Revolve’s data-driven foundation and proprietary technology entrench the business versus both digitally native and brick-and-mortar competitors within the fashion retail space.”Sales are growing in the +20% range, margins are expanding via “owned brand penetration growth and ongoing operating leverage opportunities,” and EPS growth is expected in the +30% range.Rates outperform, price target $42Guggenheim, Robert Drbul“Revolve is well-positioned to drive continued top-line growth of greater than 20%, with increasing profitability, primarily through Active Customer growth and a thriving portfolio of Owned Brands.”Revolve has “some of the most attractive growth opportunities across our coverage.” Growth drivers include:Expectation that Revolve will continue to drive strong customer acquisition growth (active customers have doubled since 2015)Focus on increasing share of wallet and loyalty through various initiatives, including loyalty programsRevolve’s Owned Brands are “highly profitable” and are the company’s “most attractive growth opportunity”The company will look to further broaden both its product offering (Men’s, Accessories, etc.) and its international presence Rates buy, price target $50William Blair, Ralph SchackartA “differentiated fashion e-tailer positioned for sustained growth.”“Revolve has several upside opportunities to augment its business model and increase its share of the global online apparel, accessories, and beauty market.” These include:More aggressive global expansion; less than 20% of the company’s net sales care internationalOwned brand penetration is increasingMore aggressive cross-sell of Revolve customers into the company’s luxury Forward businessNewer categories, including beauty, low price, and men’s, attract new customer segmentsLoyalty programRates outperform (firm does not assign price targets).Raymond James, Aaron KesslerPositive investment thesis based on:Large fashion market that is increasingly shifting online driven by next-Gen consumersRevolve has established itself as a leading fashion brand for MillennialsSocial and influencer marketing strategies are driving strong growth and cost efficientlySuccessful owned brands strategy driving strong growth at high gross marginsRaymond James expects 20%+ long-term growth and mid-teens or higher long-term Ebitda marginsRates outperform, price target $40.Barclays, Ross SandlerRates equal-weight, price target $32.“The only thing that gives us temporary pause is the 50%+ premium to the fashion e-commerce peers with similar growth and margin profiles.”“The company’s profitable-since-inception and methodical-growth approach is a welcome contrast to what we typically see om e-commerce.”(Updates share price in third bullet and chart.)To contact the reporter on this story: Janet Freund in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Will DaleyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The RealReal Inc. made its stock-market debut Friday morning, a milestone for a star in a small constellation of companies trying to use e-commerce to upend the market for selling secondhand goods.Shares of The RealReal jumped by as much 50% from their offering price in the first hour of trading, an early sign of investor enthusiasm about a digital destination for used luxury fashion items. Yet even though I believe The RealReal’s healthy revenue growth isn’t going to cool anytime soon, its path to profitability is too uncertain to get quite this excited about its prospects.The RealReal accepts designer handbags, watches, clothes and other items from consignors. It inspects each item before listing it for sale on its website and eventually shipping it off to the buyer, taking a commission on each sale. In 2018, some $711 million in sales took place on the RealReal platform, generating $207 million in revenue for the company.The RealReal’s site is squarely aligned with key trends shaping consumer behavior. Sustainability concerns are starting to factor into fashion-buying decisions the way they have for years in the food and beauty businesses, and shopping for secondhand items is a way to feel good about your ecological footprint. Plus, at a moment when we’re renting a stranger’s home on Airbnb Inc. or commuting in someone else’s car thanks to Lyft Inc., it simply feels less weird than it once did to shell out for a used handbag. In the increasingly crowded digital market for secondhand goods, The RealReal has proven itself a formidable player. By focusing specifically on the luxury tier, it stands out from other startups such as ThredUp and Poshmark. And it appears to be cultivating loyalty, with 80% of the total value of merchandise sold on its platform in 2018 coming from repeat buyers.For all these positives, I worry that The RealReal’s own business model could limit its ultimate growth potential and profit prospects. A key promise of the platform is that its staff of gemologists, horologists, art appraisers and other experts authenticate every item listed on its site. For context, the company said it processed up to 14,000 items a day in 2018. Every single one of those items must be individually priced, photographed, and precisely described. Unsurprisingly, The RealReal is using technological innovation to aid this process, including proprietary algorithms that help set pricing. It says it is working with the University of Arizona to develop technology that would help its team inspect gemstones more quickly. But for the foreseeable future, this is a people-heavy process, and one that requires quite specialized workers. Think about it: How many horologists do you know? That’s a good hint these experts probably don’t come cheap. Also, consignors have the option of starting their RealReal selling process with services such as complimentary in-home consultations. One-on-one interactions like that don’t easily get cheaper with scale. All of this makes me doubt that The RealReal will be able to achieve profitability. And it demonstrates why I am skeptical about the viability of a wave of startups embracing a similar model. In particular, I’m thinking of websites such as StockX, Goat, Flight Club and Stadium Goods, which are emerging as popular destinations for sneakerheads to buy pre-owned shoes. Investors don’t seem to share my concern: Foot Locker Inc. invested $100 million in Goat earlier this year, while StockX said this week it had raised $110 million in new financing at a $1 billion valuation.Authentication and category expertise are huge reasons for shoppers to choose these resale specialists instead of a generalist site such as eBay Inc. or Craigslist (or a mom-and-pop consignment shop, for that matter). The anti-counterfeiting measures provide a reason for trust that will be critical in bringing new shoppers to the secondhand market. But I’m not confident that the authentication processes will get efficient enough, quickly enough, for these businesses to last.This may explain why The RealReal didn’t look to be headed for quite as splashy a one-day debut as Revolve Group Inc., the fashion e-commerce company that went public earlier this month and saw its shares pop 89% on its first day of trading.Revolve’s isn’t a secondhand site and its model isn’t particularly industry-shaking; it simply sells ultra-trendy clothes to relatively affluent millennial women. But it does have some important points of differentiation, including a stable of private-label brands that accounted for 27% of sales last year. Plus, the company is already profitable.That gives me reason to believe it has greater staying power than The RealReal and the rest of the digital secondhand stores. The consumer interest in the resale model is the real deal – but so are the attending challenges to scaling it.To contact the author of this story: Sarah Halzack at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Sarah Halzack is a Bloomberg Opinion columnist covering the consumer and retail industries. She was previously a national retail reporter for the Washington Post.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
This month's two hottest IPOs have nearly doubled since going public this month, but they were even hotter a week ago.
(Bloomberg) -- The hottest IPOs aren’t looking so hot lately, thanks to a rush of defensive positioning amid a broader market rally.Once-surging new issues like Beyond Meat Inc., Revolve Group Inc., Crowdstrike Holdings Inc. and Chewy Inc. are falling for the third consecutive session on Monday, despite the market’s push toward record highs. After a weeks-long buying frenzy in recent IPOs, traders are now selling these more volatile bets amid a broader shift to defensive positions.The S&P 500 was testing its record Monday as Jerome Powell and colleagues signal easier monetary policy ahead. Rising stocks are usually a boon for recent IPOs, but investors appear to be locking in gains alongside other defensive-minded trades.Over the past three sessions, Beyond Meat has lost 16% from its stock price and Chewy fell 8%. Double-digit declines in Crowdstrike and Revolve are both stocks’ worst three-day stretches since their recent debuts.The very latest of new faces are also getting hit. Grocery Outlet Holding Corp., which opened 41% above its IPO price on Thursday, fell as much as 3% in early Monday trading. It’s joined by Stoke Therapeutics Inc., which popped 50% Wednesday as this year’s best start for a biotech or pharma IPO. Slack Technologies Inc., which jumped 49% from its reference price on Thursday, is also losing ground.Skeptical investors who stuck to their guns while the IPOs surged are finally being rewarded. Short interest represents more than 50% of Beyond Meat’s public float, according to financial analytics firm S3 Partners. That figure is at 25% for Revolve and 13% for Chewy.To contact the reporter on this story: Drew Singer in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Brad Olesen at email@example.com, Jeremy R. CookeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Shares of the online clothing retailer were falling back as the market's enthusiasm for the recent IPO seemed to wane. Here's what you need to know.
Investors have been excited for a while now about the potential for a Palantir market debut, even though the company has yet to lay out any specific plans for an initial public offering.
Two consumer-facing IPO stocks have stood out for investors in the first six months of 2019. First, Beyond Meat (NASDAQ:BYND), the meatless burger taking the world by storm, went public on May 1 at $25 a share. Since then, it's gained 468% through June 13, and that's with a big two-day selloff on June 10 and June 11. The second IPO to turn heads is Revolve Group (NYSE:RVLV), the California online fashion retailer. It went public on June 6 at $18 a share. It's up 103% through June 13, an annualized total return of more than 5,000%. InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe odds of it delivering a 5,000% return in one year is slim to none. Will it be one of the IPO stocks from the first half of 2019 to falter most in the second half? It very well could be. * 7 High-Quality Cheap Stocks to Buy With $10 However, with 65 pricings through June 13, it's possible that other 2019 IPOs such as Lyft (NASDAQ:LYFT) and Uber (NYSE:UBER) could also fit the bill. New Fortress Energy (NFE)Source: Shutterstock New Fortress Energy (NASDAQ:NFE) went public on January 30 at $14 a share selling $280 million of its stock. It lost 6.6% on its first day of trading and is down 31% through June 13. New Fortress takes diesel and heavy fuel oil and turns it into natural gas or gas-fired power. It sells these two items to customers who sign long-term, take-or-pay contracts. Utilizing an integrated liquid natural gas (LNG) production and delivery model, it plans to take advantage of the gap that exists between the supply and demand of LNG. New Energy Holdings is controlled by Fortress Investment co-CEO Wes Edens, a 57-year-old billionaire who owns a piece of both the Milwaukee Bucks and Aston Villa in the Premier League. Edens believes that U.S. natural gas exports to countries that have historically relied on oil imports to generate power are a winning proposition, which is why he co-founded it in 2014 and took it public in January. New Energy lost $36.5 million in the nine months ended September 30, 2018, 164% higher than its operating loss in the same period a year earlier. To be successful, it's going to burn through a lot of capital. I don't see it going well. However, he's a billionaire and I'm not, so you never know. Gossamer Bio (GOSS)Source: Shutterstock Gossamer Bio (NASDAQ:GOSS) went public on February 7 at $16 a share selling $276 million of its stock. It gained 12.1% on its first day of trading and is up 19% through June 13. The company, according to its prospectus, is "a clinical-stage biopharmaceutical company focused on discovering, acquiring, developing and commercializing therapeutics in the disease areas of immunology, inflammation and oncology. Our goal is to be an industry leader in each of these therapeutic areas and to enhance and extend the lives of patients suffering from such diseases."It's an admirable goal to be sure. Gossamer Bio initially expected to sell 14.4 million shares. However, serious interest from investors upped the number of shares sold to 17.3 million. It was the second biotech company of 2019 to go public at a valuation of more than $1 billion. In 2018, 58 biotechs went public, and only five were able to achieve a "unicorn" valuation. Gossamer is using the net proceeds to advance its best potential commercial drug -- GB001 is a treatment for asthma -- which is in Phase 2b clinical trials.In its first quarter as a public company, Gossamer Bio had no revenue and $34.0 million in operating expenses, compared to no revenue and $26.1 million in operating expenses in the same period a year earlier. * 6 Growth Stocks That Could Be the Next Big Thing Wouldn't it be wiser to invest in a biotech ETF or profitable biotech company than this IPO stock? Levi Strauss & Co. (LEVI)Source: Shutterstock Levi Strauss & Co (NYSE:LEVI) went public on March 20 at $17 a share selling $623 million of its stock. It gained 31.8% on its first day of trading but has since given some of those gains back, up 21% through June 13. In March, before Levi Strauss going public, I suggested seven reasons why investors should steer clear of its IPO. LEVI stock has made me look silly through the first three months as a public company. CEO Chip Bergh acknowledged that its growth was broad-based across channels and regions. However, I'm not about to change my tune despite the fact the maker of jeans had a good quarterly report with revenues of $1.44 billion, 7% higher than a year earlier, and adjusted net income of $151 million, 81% higher than the same quarter a year earlier. Of the $623 million in shares sold to the public, most were by selling shareholders; only $121 million in net proceeds went to the company. Frankly, with the company planning to open almost 100 stores in 2019, I could see its debt situation getting worse. It finished the first quarter with net debt of $319.2 million, $20 million less than at the end of November. The company has $500 million in fixed-rate debt at 5.0% interest and $542 million in fixed-rate debt at 3.375% interest. All due in 2024 and beyond. A retail company as iconic as Levi Strauss should not have any debt on its books -- even if it technically a recent IPO stock. Tradeweb (TW)Source: Shutterstock Tradeweb Markets (NASDAQ:TW) went public on April 3 at $27 a share selling $1.08 billion of its stock. It gained 32.6% on its first day of trading and is up 58% through June 13.Tradeweb operates electronic marketplaces for asset managers, hedge funds, insurance companies, and many other large financial institutions to trade various asset classes including equities, credit, and money markets. It has more than 2,500 clients operating in 62 countries around the world. Refinitiv, a company owned 45% by Thomson Reuters (NYSE:TRI) and 55% by Blackstone Group (NYSE:BX), owns just less than 70% of Tradeweb. On May 8, Tradeweb announced solid Q1 2019 earnings with revenues up 10.2% to $186.8 million on adjusted net income of $52.2 million. Except for its market data segment, all areas of its business had double-digit revenue gains in the quarter. * 3 Hot Trades for 3 Spicy IPO Stocks With zero debt and $362 million in cash on the balance sheet, I don't believe there's anything wrong with Tradeweb's business. I just feel like it's overvalued at 35 times cash flow and 46 times forward earnings. Luckin (LK)Source: Shutterstock Luckin Coffee (NASDAQ:LK) went public on May 16 at $17 a share selling $561 million of its stock. It gained 19.9% on its first day of trading; it's up 7.0% through June 13.Of all the IPO stocks on this list, Luckin is the one I'd be most wary of -- primarily because it's trying to steal Starbucks' (NASDAQ:SBUX) thunder in China. Also, the coffee market in China continues to see new, larger entrants like Restaurant Brands International's (NYSE:QSR) Tim Hortons and others, enter the scene, making it doubly hard for Luckin to become profitable. It's important to remember that Luckin is less than two years old. Going public with a valuation over $5 billion, that's pretty rich for a company that lost $238 million in 2018 on just $125 million in revenue. If Luckin operated in South Africa, not China, would you still be enthusiastic about investing in a coffee business that loses $2 for every $1 of revenue?I highly doubt it. Revolve Group (RVLV)Source: Shutterstock Revolve Group, as I stated in the beginning, went public on June 6 at $18 a share. Despite doubling in price, it continues to receive a lot of positive attention from Wall Street professionals. On June 7, Citron Research tweeted that it expects to see Revolve stock hit $50 because of its use of technology and social media to acquire new customers profitably. Citron estimates that Revolve spends $100 to bring in $300 in revenue, a sign that it's got significant growth ahead of it. On June 12, Jim Cramer of CNBC jumped into the fray, suggesting that RVLG ought to be on investors' shopping list. "They've been consistently turning a profit for years now. This is not your typical red-hot IPO that's all about revenue growth with no concern for earnings," Cramer said on Mad Money. "The only negative is that their margins took a little hit in the first quarter, but that's because they rolled out their new, lower-price concept Superdown."If you look at Revolve's prospectus, it's easy to see what Cramer means. In 2018, Revolve had an operating profit of $41.8 million, about double its operating profit from a year earlier, on $498.7 million in revenue. That's an operating margin of 8.4%, 330 basis points higher than in 2017. With more than $30 million in cash at the end of March and zero debt along with a portfolio of 21 of its own brands, innovation seems to be Revolve's calling card. * 5 Great Dividend Stocks to Buy From the Tech Sector However, with a $2.7 billion market cap, investors are paying 84 times cash flow. By comparison, you can get Lululemon (NASDAQ:LULU) for 31 times cash flow despite the fact it's up 41% year to date through June 12. Beyond Meat (BYND)Source: Shutterstock Beyond Meat is a great product. I've eaten its burgers both at restaurants and at home. Every time's been an enjoyable, tasteful experience. So, you won't get any complaints from me about the quality. Long term, I can see it becoming huge. However, when you have no analysts recommending its stock, you know it's a valuation bubble just ready to pop. On June 12, Bernstein downgraded Beyond Meat from outperform to market perform with a $123 target price. Eight analysts are covering its stock at the moment with all eight giving BYND a hold. "The downgrade is driven by valuation considerations as the stock has traded in a highly volatile manner since its IPO likely due to its limited public float and is now trading at ~31x EV/NTM Sales, implying limited upside potential from a valuation perspective," wrote Bernstein's Alexia Howard.Like several of the stocks on this list, I believe that its stock can be bought later this year or early in 2020 at a much better entry point. At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 4 Top American Penny Pot Stocks (Buy Before June 21) * 7 High-Quality Cheap Stocks to Buy With $10 * 7 U.S. Stocks to Buy With Limited Trade War Exposure * 6 Growth Stocks That Could Be the Next Big Thing Compare Brokers The post 7 First-Half IPO Stocks That Will Falter in 2019as Second Half appeared first on InvestorPlace.
In a world where department stores are losing customers in droves, you have to wonder where all of those customers are going. Jim Cramer told viewers of his Mad Money program that he had found the answer: They're going to Revolve Group Inc. Revolve was able to post 21% revenue growth year-over-year thanks to strong execution and stellar marketing that heavily leverages social media.
Revolve Group, Inc. (RVLV) today announced the closing of its initial public offering of 13,529,411 shares of its Class A common stock, which includes the full exercise of the underwriters’ option to purchase 1,764,705 additional shares, at a price to the public of $18.00 per share. The shares began trading on the New York Stock Exchange under the ticker symbol “RVLV” on June 7, 2019. Morgan Stanley & Co. LLC and Credit Suisse Securities (USA) LLC acted as lead joint bookrunning managers for the offering.