Revolve (RVLV) Stock Forecast & Price Target

Revolve Group Inc demonstrated strong performance in the fourth quarter, with a year-over-year sales growth of 14%, indicating an acceleration from the previous quarter's 10% growth, supported by improved customer engagement and a favorable selling environment. The company's active customer base also expanded by 5% year-over-year to approximately 2.668 million, surpassing market expectations, while sales from international markets surged by 29%. Looking forward, management anticipates gross margins to reach between 52.2% and 52.7% for the first quarter of 2025, exceeding analyst expectations, alongside a projected increase in brand offerings and continued emphasis on distinctive private-label products.

Revolve Group Inc experienced a significant decline in free cash flow of approximately 54% year-over-year in the fourth quarter, largely attributed to unfavorable working capital investments, particularly in inventory management. The company's gross margin for the REVOLVE segment decreased by 56 basis points year-over-year, slightly missing forecasts, while the average order value declined by 1% year-over-year, negatively impacted by a shift toward lower-AOV sales. Additionally, if top-line and member growth stagnate without margin improvements, Revolve could face downward pressure on earnings, increasing concerns about the sustainability of its current business model.