Revolve Group (RVLV) AI Stock Analysis

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Revolve Group

(NYSE:RVLV)

Select Model

Neutral 67 (OpenAI - 5.2)

Rating:67Neutral

Price Target:

$29.00

▲(17.41% Upside)

Action:DowngradedDate:02/27/26

The score is driven primarily by solid financial quality (strong balance sheet and resilient margins) and a positive earnings-call setup (improving profitability, strong cash generation, and strong early Q1 demand). These are tempered by weak near-term technical momentum and a valuation multiple that leaves less room for execution missteps, especially given tariff uncertainty and planned higher marketing spend that may cap near-term EBITDA margin expansion.

Positive Factors

Balance Sheet Strength

Very low leverage (debt-to-equity ~0.06 in 2025) and a history of minimal net debt provide durable financial flexibility. This reduces refinancing and liquidity risk, enabling Revolve to fund marketing, owned-brand investment, or cautious retail expansion without stressing the capital structure over the next several quarters.

Resilient Gross Margins

Sustained low-to-mid 50% gross margins and management's guidance for further expansion reflect structural margin advantages from product mix, owned brands, and pricing power. High gross margins create a buffer against cost headwinds and support multi‑quarter profitability even with elevated operating investments.

Diversified Growth Drivers

Multiple durable levers—owned brands (20% of segment sales), accelerating beauty, FWRD luxury momentum, and AI-led personalization—reduce reliance on any single channel. This diversification supports sustained customer acquisition, higher margin mix, and scalable revenue growth over the coming 2–6 months.

Negative Factors

Tariff-Related Margin Risk

Tariff timing and magnitude are an external, structural risk that directly affect landed costs and gross margin. Because guidance does not assume potential refunds and management flags sensitivity, persistent or worsening tariff outcomes could produce multi‑quarter margin pressure and meaningful earnings variability.

Higher Marketing Spend

A planned, material uplift in marketing (~125–140 bps) is a structural operating-cost increase that will cap near‑term adjusted EBITDA expansion unless revenue sustainably outpaces the additional spend. This raises the bar for execution and prolongs the timeline to convert gross‑margin gains into higher operating margins.

Cash Flow Volatility

Although absolute cash generation is positive, the sharp decline in free cash flow growth (~21.5% in 2025) and historically choppy OCF reduce confidence in consistent internal funding for investments. Volatile cash conversion can constrain discretionary initiatives or require reliance on external liquidity during stress periods.

Revolve Group (RVLV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.72B

Dividend YieldN/A

Average Volume (3M)1.29M

Price to Earnings (P/E)29.0

Beta (1Y)1.86

Revenue Growth9.24%

EPS Growth35.68%

CountryUS

Employees1,632

SectorConsumer Cyclical

Sector Strength84

IndustrySpecialty Retail

Share Statistics

EPS (TTM)0.26

Shares Outstanding40,415,440

10 Day Avg. Volume2,059,417

30 Day Avg. Volume1,292,679

Financial Highlights & Ratios

PEG Ratio1.44

Price to Book (P/B)4.20

Price to Sales (P/S)1.76

P/FCF Ratio44.85

Enterprise Value/Market Cap0.91

Enterprise Value/Revenue1.27

Enterprise Value/Gross Profit2.38

Enterprise Value/Ebitda17.42

Forecast

1Y Price Target

$29.55

Price Target Upside19.64% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering14

EPS Forecast (FY)0.91

Revenue Forecast (FY)$1.33B

Revolve Group Business Overview & Revenue Model

Company DescriptionRevolve Group, Inc. operates as an online fashion retailer for consumers in the United States and internationally. The company operates in two segments, REVOLVE and FWRD. It operates a platform that connects consumers and global fashion influencers, as well as emerging, established, and owned brands. The company offers women's apparel, footwear, accessories, and beauty styles under established and emerging brands, as well as owned brands. It also provides various luxury brands. The company was formerly known as Advance Holdings, LLC and changed its name to Revolve Group, Inc. in October 2018. Revolve Group, Inc. was founded in 2003 and is headquartered in Cerritos, California.

How the Company Makes MoneyRevolve Group generates revenue primarily through direct sales of fashion and lifestyle products via its online platform. The company utilizes a drop-shipping model, allowing it to offer a wide array of products without holding large inventories. Key revenue streams include sales from its proprietary brands and third-party brands, as well as shipping and handling fees. Additionally, Revolve invests in influencer marketing and collaborations, which enhance brand visibility and drive sales. Significant partnerships with popular fashion influencers and celebrities also contribute to its revenue by creating exclusive collections and promotional campaigns that attract customers.

Revolve Group Key Performance Indicators (KPIs)

Any

Total Active Customers

Total Active Customers
Measures the number of customers who have made a purchase within a specific period, showing customer engagement and the potential for repeat business.

Chart InsightsRevolve has grown its active customer base steadily over multiple years, but additions have meaningfully decelerated and essentially plateaued in the past several quarters—signaling weakened acquisition momentum or higher churn. That makes the company’s margin-led improvement (owned-brand mix, AI efficiencies, China traction) critical: management needs to extract more spend per customer or reignite acquisition (physical retail, marketing) to translate profitability gains into durable top-line growth; watch ARPU, repeat rates and return rates next quarters.

Data provided by:

The Fly

Revolve Group Earnings Call Summary

Earnings Call Date:Feb 24, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:May 06, 2026

Earnings Call Sentiment Positive

The call presented a strong set of operating and financial results — double-digit Q4 revenue growth, sizable EBITDA and net income expansion, robust cash generation, meaningful gross margin improvement, category diversification (notably beauty), FWRD momentum, owned brand progress, and multiple AI-led revenue and efficiency gains. Offsetting risks include tariff-related uncertainty that can impact gross margin, planned higher marketing investments in 2026 that will pressure near-term leverage, some one-time G&A items, and the early-stage nature and cost of physical retail expansion. On balance, the highlights materially outweigh the lowlights, as the company demonstrated improving top-line momentum, expanding profitability, healthy cash flow, and a concrete plan to invest for future growth while maintaining a strong balance sheet.

Q4-2025 Updates

Positive Updates

Fourth Quarter Revenue Growth

Net sales of $324 million in Q4, up 10% year-over-year; 2-year stacked revenue growth of 26% (improved 11 points vs Q3). REVOLVE segment +10% and FWRD segment +14% year-over-year.

Strong Profitability Expansion

Q4 net income rose 58% year-over-year to $19 million; diluted EPS $0.26, up 53% year-over-year. Adjusted EBITDA of $26 million in Q4, up 44% year-over-year, driving ~190 basis points expansion in adjusted EBITDA margin to 8.1% (from 6.2%).

Full Year Financial Gains and Cash Generation

Full-year 2025 net sales +8% year-over-year. Net income $61 million (+25% YoY) and adjusted EBITDA $94 million (+35% YoY). Operating cash flow $59 million (+123% YoY) and free cash flow $46 million (+157% YoY). Total cash and equivalents $303 million at year-end, up $47 million (18% YoY); no debt.

Gross Margin Expansion

Consolidated gross margin was 53.3% in Q4, up ~78 basis points year-over-year. Full-year gross margin increased ~100 basis points year-over-year and management expects FY2026 gross margin of 53.7%–54.2% (about +45 bps YoY at midpoint).

Customer and Demand Momentum

Active customers grew to 2.8 million (+6% YoY). Total orders in Q4 were 2.4 million (+13% YoY), the highest order growth in three years. Quarter-to-date Q1 2026 net sales through first seven weeks up ~16%.

Category and Geographic Strength

Beauty sales grew 43% year-over-year in Q4; men's and beauty each delivered healthy double-digit growth. Domestic net sales +10% and international net sales +13% in Q4; international outperformed full year with 12% growth.

FWRD Luxury Momentum

FWRD Q4 gross profit dollars increased ~33% YoY and FWRD achieved roughly 6.5 points of margin expansion (highest ever FWRD Q4 margin). FWRD acquired the most new customers in any quarter in company history; personal shopping program delivered ~100% sales growth in 2025.

Owned Brands Progress

Owned brands contributed ~20% of REVOLVE segment net sales in 2025, up nearly 2 points YoY, supporting higher gross margins and expected to be a multi-year margin driver.

AI and Technology Wins

AI-driven personalization and search enhancements drove several million dollars in annualized revenue gains; AI improvements applied across merchandising, marketing, fraud detection and operations (e.g., call transcription, invoice processing), and an initial generative AI Q&A test launched on the site.

Improved Operating Efficiency

Fulfillment costs were 3.2% of net sales (Q4), selling & distribution and marketing outperformed guidance (marketing 14.0% of net sales, down 74 bps YoY). Inventory growth (~10% YoY) was broadly in line with sales.

Negative Updates

Tariff-Related Uncertainty

Management cited tariff pressures as a material uncertainty for gross margin and supply chain; outlook and gross margin guidance are sensitive to timing and level of tariffs and mitigation outcomes (including pending Supreme Court implications not modeled).

Guidance and Margin Pressure from Increased Marketing

Management plans to increase brand marketing in 2026 (marketing expected ~15.3%–15.8% of net sales for FY2026, ~125–140 bps higher YoY at midpoint), which will pressure near-term operating leverage and contributes to guidance implying flattish adjusted EBITDA margin (~7.5% implied).

REVOLVE Segment Margin Pressure and Mix Shifts

REVOLVE gross margin declined slightly in Q4 due to tariff impact and category mix shifts (e.g., beauty growth impacting AOV), partially offset by owned brand expansion; AOV decreased 2% YoY to $296.

One-Time and Nonroutine Costs

General & administrative exceeded guidance in Q4 ($42 million) driven largely by $1.3 million in nonroutine transaction costs and higher-than-anticipated stock-based compensation tied to performance—these items are excluded from adjusted EBITDA but impacted GAAP expense lines.

Adjusted EBITDA Margin Near-Term Ceiling

While Q4 showed meaningful margin expansion, FY2026 guidance implies only modest additional EBITDA margin improvement (management guiding to high-single-digit consistency longer-term), with near-term adjusted EBITDA margin expected to be roughly flat vs. recent levels.

Seasonal and Comparative Risks

Q1 and remainder of year face tougher prior-year comparisons (noted for first quarter due to last year's January softness) which could temper reported growth rates despite strong quarter-to-date trends.

Physical Retail Execution Risk and Caution

Physical retail is early-stage with only two permanent stores (Aspen, The Grove); management is intentionally pacing expansion, signaling execution risk and incremental costs as they scale storefronts and retail operations.

Gross Margin Guidance Sensitivity

Management noted gross margin outlook is especially susceptible to variability given uncertainty over tariff timing/levels and the timing of mitigation benefits, creating earnings variability risk for modeling.

Company Guidance

The company guided Q1 2026 gross margin of 52.8%–53.3% (≈+105 bps YoY at the midpoint) and full‑year 2026 gross margin of 53.7%–54.2% (≈+45 bps YoY at the midpoint), noting stronger year‑over‑year margin expansion in H1 as they lap markdown‑algorithm gains from H2 2025 and that outlook is sensitive to current tariff timing/mitigation (does not assume any potential refunds). They expect fulfillment of ~3.2% of net sales in Q1 and 3.2%–3.4% for the full year (≈+10 bps YoY midpoint); selling & distribution of ~17.1% in Q1 and 17.1%–17.3% for FY (≈+30 bps Q1, ≈+10 bps FY midpoint); marketing of ~15.7% in Q1 and 15.3%–15.8% for FY (implying ≈+140 bps Q1 and ≈+125 bps FY at the midpoint) to support brand and owned‑brand initiatives; G&A of ~$40.5m in Q1 and $161m–$164m for FY (midpoint ≈+4% YoY); an effective tax rate of ~24%–26% for FY; and a near‑term adjusted EBITDA profile that is roughly flat (implied ~7.5% EBITDA margin), while noting quarter‑to‑date net sales through the first seven weeks of 2026 are up ~16% and inventory, tariff, and macro variability could affect results.

Revolve Group Financial Statement Overview

Summary

Solid fundamentals supported by steady multi-year revenue growth, resilient low-to-mid 50% gross margins, and a conservatively financed balance sheet (very low leverage). Offsets include profitability below the 2021 peak and uneven cash-flow consistency, including a reported decline in 2025 free cash flow.

Income Statement

Positive

Revenue has expanded steadily from $581M (2020) to $1.23B (2025), with a return to growth after the 2023 dip. Gross margin has remained resilient in the low-to-mid 50% range, supporting profitability. However, operating and net profitability are meaningfully below the 2021 peak (net margin down from ~11.2% in 2021 to ~5.0% in 2025), and year-to-year earnings power has been more volatile than the top line.

Balance Sheet

Very Positive

The balance sheet looks conservatively financed, with low leverage throughout the period (debt-to-equity ~0.06 in 2025, and near-zero debt in 2020). Equity and assets have grown consistently alongside the business, and returns on equity remain healthy (~12.0% in 2025), though they have come down materially from the unusually strong 2021 level. Overall, financial risk from leverage appears limited.

Cash Flow

Positive

Cash generation is positive, with 2025 operating cash flow of ~$59.4M and free cash flow of ~$48.0M, and free cash flow tracking net income reasonably well (about 81% of net income in 2025). That said, free cash flow growth turned sharply negative in 2025 (down ~21.5%), and operating cash flow has been choppy across years, which reduces confidence in near-term cash flow consistency despite solid profitability.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.23B	1.13B	1.07B	1.10B	891.39M
Gross Profit	655.78M	593.27M	554.20M	592.32M	489.82M
EBITDA	86.90M	56.58M	27.23M	77.93M	109.80M
Net Income	61.71M	49.56M	28.15M	58.70M	99.84M
Balance Sheet
Total Assets	765.00M	665.55M	608.89M	579.32M	480.41M
Cash, Cash Equivalents and Short-Term Investments	292.26M	256.60M	245.45M	234.72M	218.46M
Total Debt	32.45M	40.73M	40.99M	24.50M	6.94M
Total Liabilities	252.47M	227.76M	223.75M	199.75M	163.40M
Stockholders Equity	512.53M	438.19M	385.14M	379.57M	317.01M
Cash Flow
Free Cash Flow	47.99M	21.04M	39.14M	18.27M	60.12M
Operating Cash Flow	59.40M	26.69M	43.34M	23.44M	62.31M
Investing Cash Flow	-14.87M	-9.11M	-4.20M	-5.17M	-2.19M
Financing Cash Flow	-1.39M	-5.36M	-30.38M	887.00K	12.77M

Revolve Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price24.70

Price Trends

50DMA

28.07

Negative

100DMA

25.79

Negative

200DMA

23.63

Positive

Market Momentum

MACD

-0.90

Negative

RSI

43.16

Neutral

STOCH

48.35

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RVLV, the sentiment is Negative. The current price of 24.7 is below the 20-day moving average (MA) of 25.40, below the 50-day MA of 28.07, and above the 200-day MA of 23.63, indicating a neutral trend. The MACD of -0.90 indicates Negative momentum. The RSI at 43.16 is Neutral, neither overbought nor oversold. The STOCH value of 48.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RVLV.

Revolve Group Risk Analysis

Revolve Group disclosed 64 risk factors in its most recent earnings report. Revolve Group reported the most risks in the "Finance & Corporate" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Revolve Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WINA	71 Outperform	$1.72B	34.96	―	3.35%	3.35%	1.97%
RVLV	67 Neutral	$1.72B	29.01	12.98%	―	9.24%	35.68%
SBH	64 Neutral	$1.50B	7.65	24.38%	―	-0.42%	31.64%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SVV	61 Neutral	$1.38B	65.39	5.28%	―	6.45%	-102.30%
TDUP	53 Neutral	$508.15M	-38.47	-35.00%	―	-4.90%	50.77%
EYE	52 Neutral	$2.11B	―	-0.37%	―	-1.58%	85.04%

* Consumer Cyclical Sector Average

Performance Comparison

RVLV

Revolve Group

25.56

2.55

11.08%

SBH

Sally Beauty

15.25

6.13

67.21%

WINA

Winmark

452.56

143.32

46.35%

EYE

National Vision Holdings

29.07

17.35

148.04%

TDUP

thredUP

3.74

1.41

60.52%

SVV

Savers Value Village Inc.

8.74

1.64

23.10%

Revolve Group Corporate Events

Business Operations and StrategyPrivate Placements and Financing

Revolve Group Extends Credit Facility, Enhancing Liquidity Flexibility

Positive

Feb 4, 2026

On February 2, 2026, Revolve Group, Inc. executed a First Amendment to its existing Amended and Restated Credit Agreement, originally dated March 23, 2021, with subsidiaries Alliance Apparel Group, Inc., Eminent, Inc., and Advance Development, Inc. as borrowers, and Bank of America, N.A. as administrative and collateral agent. The amendment extended the credit facility’s maturity to February 2, 2031, modified the eligible inventory component of the borrowing base, revised certain reporting obligations, and provided greater flexibility under some negative covenants, while noting that no revolving loans were outstanding under the facility as of the amendment date, signaling reinforced long-term liquidity and financial flexibility for the company without immediate additional leverage.

The most recent analyst rating on (RVLV) stock is a Buy with a $34.00 price target. To see the full list of analyst forecasts on Revolve Group stock, see the RVLV Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 27, 2026