William Blair analyst Dylan Carden has maintained their neutral stance on BRLT stock, giving a Hold rating on August 1.
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Dylan Carden has given his Hold rating due to a combination of factors influencing Brilliant Earth Group’s recent performance. The company’s second-quarter sales and earnings exceeded expectations, primarily due to better-than-expected operating leverage, especially in marketing, despite a decline in gross margin. While revenue showed a year-over-year increase driven by order growth, the average order value saw a significant drop, which impacted overall financial metrics.
Despite these challenges, the company managed to reduce marketing expenses as a percentage of sales, achieving the lowest levels in the past eight quarters. This cost efficiency contributed to an adjusted EBITDA margin that surpassed market expectations. However, the gross margin decline and limited visibility in the macroeconomic environment pose risks. The stock’s valuation, based on future EBITDA and revenue estimates, reflects these uncertainties, justifying the Hold rating.
According to TipRanks, Carden is a 5-star analyst with an average return of 23.1% and a 62.89% success rate. Carden covers the Consumer Cyclical sector, focusing on stocks such as Boot Barn, Stitch Fix, and Revolve Group.
In another report released on August 1, Telsey Advisory also maintained a Hold rating on the stock with a $2.00 price target.