Revolve (RVLV) Stock Forecast & Price Target

Revolve Group Inc. demonstrated strong performance in the fourth quarter, achieving a 14% year-over-year growth in sales and improved customer engagement, particularly with domestic sales rising by approximately 11% and international sales by 29%. The active customer base expanded to 2.668 million, reflecting a 5% year-over-year increase, surpassing expectations and underscoring the effectiveness of marketing and brand-building efforts. Furthermore, the company projects gross margins for the first quarter and full year 2025 to be above previous estimates, indicating anticipated profitability improvements alongside an expanded range of unique fashion products and brands.

Revolve Group Inc. experienced a significant decline in free cash flow, dropping approximately 54% year-over-year to around $18 million in the fourth quarter, primarily due to unfavorable working capital investments, including increased inventory levels. While gross margins for the REVOLVE segment fell slightly short of expectations at 54.6% and decreased year-over-year, the AOV also declined approximately 1% year-over-year, indicating a shift towards lower-priced offerings which could further pressure margins. Furthermore, if revenue and member growth stagnate, projections suggest earnings per share could drop to $0.40, translating to a pessimistic outlook for the stock price based on a moderate valuation multiple.