Revolve (RVLV) Stock Forecast & Price Target

Revolve Group Inc. demonstrated strong performance in the fourth quarter, achieving a year-over-year growth of 14%, with domestic and international sales increasing by approximately 11% and 29%, respectively. The company reported a total of 2.668 million active customers, reflecting a 5% growth year-over-year, which surpassed expectations, while also managing to expand its inventory by 13% to $229.2 million. With management forecasting an increase in gross margins for both the first quarter and fiscal year 2025, Revolve is well-positioned to sustain its upward trajectory in the competitive e-commerce apparel market.

Revolve Group Inc. experienced a significant decline in free cash flow, dropping approximately 54% year-over-year in the fourth quarter, primarily due to increased working capital investments despite an uptick in net income. Additionally, the company reported a slight miss in gross margin expectations for its REVOLVE segment, which fell to 54.6%, and a concerning decline in average order value by 1%, indicating potential challenges in pricing power and sales mix. Should top-line and member growth stall without an improvement in profit margins, projections suggest that earnings per share could diminish significantly, posing considerable downside risk for the company's stock performance.