Revolve Group’s Financial Outlook Hampered by Tariffs: Analyst Maintains Hold Rating

Nathan Feather, an analyst from Morgan Stanley, maintained the Hold rating on Revolve Group (RVLV – Research Report). The associated price target was lowered to $19.00.

Nathan Feather has given his Hold rating due to a combination of factors impacting Revolve Group’s financial outlook. One of the primary concerns is the effect of tariffs, which have already started to weigh on the company’s revenue growth and gross margins. In April, Revolve’s revenue growth decelerated, a change attributed to macroeconomic factors as customers shifted towards purchasing lower-priced items. This has led the company to revise its internal revenue projections downward and reduce its gross margin guidance for the fiscal year 2025.
Feather notes that the tariff impact is expected to continue affecting Revolve’s financial performance, particularly in the fourth quarter, where gross margins could drop significantly compared to earlier in the year. Despite the company’s strong underlying performance, including positive customer trends and cost optimizations, the persistent tariff issues overshadow these strengths. As a result, Feather maintains a cautious outlook with a Hold rating, suggesting that while there is potential for modest upside, the risks associated with tariffs necessitate a more conservative stance.

In another report released today, Barclays also maintained a Hold rating on the stock with a $17.00 price target.