UPDATE: MKM Partners Starts Poshmark (POSH) at Buy
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(Updated - February 2, 2021 8:03 AM EST)
MKM Partners analyst Roxanne Meyer initiates coverage on Poshmark (NASDAQ: POSH) with a Buy rating and a price target of $88.00.
The analyst commented, "We are initiating on POSH, a social online resale marketplace, with a Buy rating and $88 price target. Competitive strengths include its marketplace community, proprietary technology, and visionary, founder-led management. We view POSH as well positioned to grow market share from the accelerated shift to online and super-charged growth of resale, propelled by the pandemic. While each resale player has unique propositions for buyers and sellers, we findPOSH’s asset-light model particularly attractive and provides the clearest path to profitability longer-term. We see share gains driven by the opportunity for 30%+ active buyer growth, strong brand recognition, ample sales catalysts, and supported by elevated marketing, which we view as opportunistic. On valuation, we include REAL and marketplace models ETSY, EBAYand FTCH (All Not Rated) as comps. On an EV/Sales basis, POSH trades at 11.0x '22 sales, above the peer average of 7.1x, and vs. ETSY’s 11.2x. Our $88 price target is 14x our '22 sales estimate of $487mn. We believe a premium to ETSY is warranted given: 1) Expected tripling of the resale market; 2) Our view that POSH will lead in 2-year GMV growth, 3) POSH is an earlier stage model and 4) A halo effect from other resale IPOs."
Shares of Poshmark closed at $69.78 yesterday.
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