UPDATE: Raymond James Starts Poshmark (POSH) at Outperform
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Raymond James analyst Rick patel initiates coverage on Poshmark (NASDAQ: POSH) with a Outperform rating and a price target of $16.00.
The analyst comments "We are transferring coverage of Poshmark (POSH) from Aaron Kessler to Rick Patel with a Market Perform rating. We see POSH benefiting from long-term tailwinds that include the shift toward digital, social commerce, resale, and global expansion. Self-help initiatives across product development, categories, and international should also help POSH gain market share amongst traditional competition. While we like the LT story, our neutral stance reflects lack of near-term visibility as GMV and revenue growth have been decelerating (GMV +29%/+27%/+11% (est) in 2020/2021/2022E) on tough y/y comparisons and headwinds stemming from IDFA changes (which have made customer acquisition more challenging). Recent macro headwinds across the industry are also a risk factor. Concurrently, we model EBITDA losses in 2022 (in line with guide) to persist in 2023 as we believe marketing is likely to remain elevated to drive GMV growth in a tough environment. We acknowledge attractive valuation at 1.1x EV/revenue and 1.3x EV/GP, and net cash is ~$7.70/share; but given the market’s heightened sensitivity to tech names with depressed margins, we don’t see the stock re-rating until there’s better visibility on stronger top-line growth and a clearer pathway toward re-achieving profitability."
Shares of Poshmark closed at $11.55 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesRaymond James, Definitive Agreement, Aaron Kessler
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